Someone's getting filthy rich out of this resurgent mining boom, but it ain't the federal government.
Victoria on the brink of recession
Online political editor Tim Lester says yesterday's ordinary growth numbers increase the chances of a tough May budget.
The secretary of the Treasury, Martin Parkinson, has used his first anniversary in the job to warn that Australia faces a decade of ''razor-thin'' surpluses despite the biggest boom in the nation's terms of trade since the gold rush days.
It's an astonishing - and, on the surface, somewhat confusing - result.
Australians, after all, are accustomed to the federal government bathing in an embarrassment of revenue riches delivered by the mining boom.
During the mid-noughties, Treasury was habitually embarrassed when its revenue forecasts - which assumed an imminent plateau in commodity prices - proved too pessimistic. This enabled the then treasurer, Peter Costello, to perform his annual crowd-pleasing trick of pulling a bigger-than-expected surplus out of his budget hat.
The revenues from the first wave of the mining boom helped pay off government debt, create a Future Fund to cover unfunded public service superannuation liabilities and keep the budget in surplus at 1 per cent of gross domestic product.
The rest was returned to taxpayers in successive years of income tax cuts which took the top individual tax rate from 47 per cent to 45 per cent and pushed out the point at which it applied from $60,001 in 2002-03 to $150,001 in 2007-08 and $180,001 today. And come election time, there was always plenty of cash in the kitty for one-off bonus payments for seniors and families.
But this time is different. The global financial crisis has fundamentally reshaped the Australian economy. Tax revenue as a percentage of GDP has fallen as a result.
Asset prices have gone backwards on shares and stagnated on housing, reducing tax collected through the capital gains tax. Whereas one in 12 houses changed hands each year during the early noughties, today it is just one in 25, as the Reserve Bank deputy governor Phillip Lowe pointed out in a separate speech yesterday. And even when houses sell, the capital gains realised are not growing anything like they once were.
Households - which had already reached the limits of their debt-fuelled spending binge in response to structurally lower interest rates - have also reacted to the global financial turmoil by reducing spending. Revenue from the goods and services tax remains depressed.
A higher dollar this time around - a symptom of Australia's relative economic success - is also depressing company profits in the non-mining sectors of the economy, particularly in tourism, education services and some parts of manufacturing. Finally, despite mining companies producing around a fifth of total profits, they represent only a tenth of total company tax paid. A huge ramp-up in investment in infrastructure means they can offset their taxable profits by claiming deductions for the depreciating value of their assets.
Hitting the government's surplus target for 2012-13 will be no easy task.
Follow the National Times on Twitter: @NationalTimesAU