Wayne Swan said Australia remained well placed to benefit from China's continued strong growth. Photo: Andrew Meares
TREASURER Wayne Swan says the mining boom ''still has a long way to run'' despite a sharp dip in projected takings from the industry forcing the federal government to backtrack from its promise to deliver a budget surplus.
The volatility in commodity prices has also wreaked havoc in the boardrooms of major global miners in recent months, with Rio Tinto chief executive Tom Albanese the latest to depart this week.
Speaking in New York, the Treasurer said talk of the mining boom being over was ''claptrap'' and that the peak in commodity prices a year ago was ''expected''.
He said a mining boom typically had three overlapping phases: a boom in prices, then investment, and then in production.
''We passed the peak in prices a bit over a year ago as we'd expected, but we also see our terms of trade remaining at historically high levels. And the second and third phases of the boom still have a way to run.''
Mr Swan used the prominent speech, at the G'Day USA Financial Services luncheon, to set up his economic agenda for the upcoming election campaign. He said he was ''cautiously optimistic'' about the state of the global economy, and believed 2013 could be a better year for global recovery if governments supported jobs and growth.
Mr Swan said Australia remained well placed to benefit from China's continued strong growth, particularly with the latest economic data suggesting the world's second-largest economy was stabilising. China reported solid year-on-year economic growth of 7.9 per cent on Friday.
''I've always been an optimist about China,'' he said. ''And I think the data we've seen should give us confidence that they've still got the policy capacity to manage their economy, and they've been getting it pretty right.''
But Chinese economists continue to warn against being overconfident of China's recovery trajectory.
IHS Global Insight analyst Ren Xianfang said China's economy was ''not completely out of the woods yet''. ''The rebound by itself looks quite shaky,'' Mr Ren said. ''While domestic demand looks to be coming back, it looks to be a rather anaemic rebound.''
In the September quarter, Mr Swan said, business investment as a percentage of the Australian economy reached a 50-year high - 8.5 per cent of GDP.
''In fact, mining firms are planning to spend more than twice as much this year as they did two years ago,'' he said.
And while not all projects would go ahead as scheduled, he said $650 billion worth of resource projects were either under way or on the drawing boards - ''massive in the context of our $1.5 trillion economy''.
He said a record $268 billion of resources projects were largely locked in, and would drive investment and export volumes.