PERTH (miningweekly.com) – Federal Treasurer Scott Morrison on Tuesday said that Australia’s future Budget would rely more heavily on a diversified economy, after revealing a revenue write-down of nearly A$34-billion caused by falling commodity prices, declining terms of trade and weaker global growth.

Launching the mid-year economic and fiscal outlook (MYEFO), Morrison noted that Australia was heading towards a more diversified economy, where the impact of a falling iron-ore price would not have the same results as those perceived on the current Budget.

“That's why our primary focus is on policies that promote growth and jobs, whether it is in the tax system or whether it is in the infrastructure roll-out or whether it is the innovation statement or whether it's in the trade sector where we have had the most ambitious trade agenda of any government in recent memory and the runs on the board to back that up.

“The task is to keep that transition occurring. Australians are making that transition and this plan backs Australians.”

Finance Minister Mathias Corman pointed out that iron-ore currently comprised some 20% of the country’s national export income, meaning that a lower iron-ore price would have significant impacts on the bottom-line.

“The price for iron-ore, the price we are able to achieve in global markets for iron-ore went from a high of $180/t to about, you know, $38/t, $39/t at the moment.”

“But the good news is, the good news is that the economy, including here in Western Australia, is actually transitioning quite well from significant resource investment-driven growth to broader drivers of economic activity. We are very confident that, over time, that will show significant progress here in Western Australia,” Corman said.

Responding to questions on whether the government’s use of a $39/t price for iron-ore was considered realistic, Treasurer Morrison noted that this price, which was used in the MYEFO calculations, was based on the four-week average of the iron-ore price.

“There are some particular factors impacting on the iron ore price out of China at the moment, there are seasonal issues, there are weather issues, there are some financing issues that go to how credit is being made available at the back end of the year. There are some rather specific figures. This is an update; this is where it was struck at the time of finalising this document.”

“Obviously, if things change in the future, then future updates and future budgets will reflect that. The key here is we've got to keep this transitioning occurring in our economy and that is particularly important here in Western Australia.”