“This resources boom had better continue – potentially, there’s $1.31 trillion depending on it.” That’s the lead in an Oz article today explaining the total cost of 256 new projects either currently under construction or being considered. It’s not a number merely grabbed out of the air and doubled either – it is calculated by KPMG in its 2007 energy and mining outlook.

The Oz also states that “capital spending in the year to June 30 for new mines or oil and gas projects would be 38% up on the previous year and come in at $14.2 billion.”

If recent metal price gains are any indication, the resource boom is indeed here to stay. It is little wonder, then, that the resource-rich states are awash with cash leaving the eastern seaboard states trailing in a cloud of (drought-induced) dust – a fact made clear by the contrasting house price statistics.

As if that isn’t enough, the NAB State-by-State outlook for November found that although drought-conditions are affecting all states, WA is expected to produce over 50% of the total wheat crop for Australia, compared with five-year average of about 36% – further exacerbating the nation’s two-speed economy.

Also, a parliamentary committee heard yesterday how the resource boom has contributed to the decline in manufacturing by putting upward pressure on the prices of raw materials and exchange rates.

Henry is happy to hear that Costello and co have maintained that Qantas will stay in Australian hands – although Bryan Frith’s analysis in today’s Oz provides an interesting take on the concept of “national interest”. The main concern, for national interest’s sake, is maintaining current service levels and spending on maintenance – the last thing we need is the loss of Qantas’s great reputation. Also, Henry doesn’t want to see a mutant bald eagle/kangaroo on the great airline’s tail.

Read more at Henry Thornton.

Peter Fray

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