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'Golden bit' is over for resources boom: Treasury boss
01/06/2012 - Treasury boss Martin Parkinson says he has sympathy for mining companies, because the peak of resources boom has probably passed and the "golden bit" is over.
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But he also told a Senate committee the resulting pipeline of investment has some way to run.
Dr Parkinson said he was aware mining companies were focused on how to deliver appropriate rates of return to their shareholders, given rising costs.
"I actually sympathise with the comments they are making, since the golden bit is over," he told a the estimates hearing in Canberra on Thursday.
"That golden bit was never going to last forever."
Dr Parkinson also said while there were concerns about the outlook for China, the path to modernisation was never going to be smooth and there would be volatility on the way.
Treasury macroeconomic group executive director David Gruen told the hearing Australia was enjoying the biggest mining investment boom in its history.
"We and the Reserve Bank have had a look at past investment booms, and as a share of the economy, it is about to be more than double the size of any previous one - and the data goes back to the 1860s and the gold rush," he said.
Dr Gruen said investment proposals stand at some $500 billion, with a big increase already seen this financial year and another big increase expected in the next financial year.
Investment in new engineering and construction is forecast to grow by about 36 per cent this year and about 20 per cent in 2012/13.
But the growth may not last.
"It can't go on growing at that rate," he said.
"It seems very likely that the level of investment in the mining sector may come down somewhat, but after all, it is in the clouds at the moment ... (and) we think it is something that will be with us for some considerable time."
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