Budgets are never short of an impressive statistic or two, but this one contains some rippers. While the political focus is on the short term — how a $49 billion deficit morphs into a $3.5 billion surplus by 2012-13 — the biggest news in this budget lies hidden beyond its official four-year horizon.
In a chapter of the budget known as the “Treasury sermon”, Treasury minds have been let loose to imagine what life will be like in the “Asian Century”. If you thought the rise of China was just about coal and iron ore, think again, they say.
Rising incomes and consumption in China mean that by 2030, the middle classes of the Asia-Pacific will dwarf those in Europe and North America. This will have “major and lasting effects on how Australia does business in the 21st century”, Treasury says.
Australia will soon be able to tap into rising Chinese demand not just for raw materials, but also high-end consumables and services. This will continue Australia’s transformation from an industrial to a service economy.
Already, wealthy Asian middle classes are consuming more Australian education services and tourism opportunities. Chinese visitors to our shores outnumber Japanese and will soon overtake US visitors. Competition for the Asian dollar will be fierce, but if we play it right, the China boom could be about so much more than shipping dirt.
IRVINE INDEX: SPECIAL BUDGET EDITION!
Number of middle-class consumers expected to reside in the Asia-Pacific region in 2030, representing two-thirds of the entire global middle class by then
Estimated size of the middle classes in North America and Europe in 2030
Number of Chinese visitors to Australia last financial year, surpassing for the first time the number of Japanese visitors
Treasury’s estimate of the value of mining investment as a share of gross domestic product next year, exceeding the combined investment plans of every other industry in Australia for the first time
Number of households in urban China
Number of vehicles per 100 households in urban China, up from fewer than one at the turn of the century
Number of microwave ovens per 100 households in urban China, up from 16 in 2000
Number of computers per 100 households in urban China, up from eight in 2000
Number of mobile phones per 100 households in urban China, up from 16 in 2000