Australia’s policy makers are dealing with a mining boom unprecedented in our history. It is a boom that has been much celebrated. But we know that it will not last forever. At present rates of extraction, Australia’s known reserves of iron ore will be exhausted within a human lifetime, and known reserves of black coal will be exhausted within a century. Today, these two products make up more than a third of Australia’s total exports. As a whole, mining contributes about 60 per cent of Australia’s total exports, and at present rates of extraction those exports will last, on average, about 75 years. Of course, there will be further discoveries of mineral deposits in Australia. And rates of extraction could fall as other producers expand capacity and importing countries transform their economies in ways that reduce reliance on raw materials.
Which ever of these scenarios emerges, future generations of Australians will identify the present generation as that which extracted unparalleled monetary reward from the continent’s non-renewable natural resources; a ‘monetisation’ of non-renewable resources unmatched by any previous generation of Australians, and unlikely to be matched by any that follows. Those future generations – our children’s children – will have reason to examine whether we made the most of a mining boom that we knew could not last forever.
Who would want to sit that test?
Dr Ken Henry AC FASSA
Dr Henry was appointed as a Special Adviser to the Prime Minister in 2011 and is responsible for leading the development of a White Paper on ‘Australia in the Asian Century‘.
Dr Henry is also Chair of the Institute of Public Policy at the Australian National University, Chair of the Advisory Council of the SMART Infrastructure Facility at the University of Wollongong, a member of the Board of National Australia Bank Limited, and a member of the Board of Reconciliation Australia. He is also a Governor of CEDA and a Council member of Voiceless.
Dr Henry was Secretary to the Treasury from 2001 to 2011. In his role as Treasury Secretary, Dr Henry also served as a member of the Board of the Reserve Bank of Australia, the Board of Taxation, the Council of Financial Regulators and was Alternate Governor (for Australia) of the International Monetary Fund. Dr Henry chaired the ‘Review into Australia’s Future Tax System in 2009-10’.
Dr Henry holds a first class honours degree in economics from the University of NSW (1979) and a PhD in economics from the University of Canterbury, NZ (1982).
Dr Henry was awarded a Companion of the Order of Australia General Division (AC) in the Australia Day Honours 2007. In May 2009 Dr Henry was awarded the degree of Doctor of Business honoris causa from the University of NSW. In August 2012 Dr Henry was elected as an Honorary Fellow of the Academy of the Social Sciences in Australia.