1 Office of the Chief Economist Global economic growth The outlook for the Australian resources sector Mark Cully APPEA Tax and Commercial Conference 29 October 2015

2 Commodity prices Have come down substantially from their peaks Sources: IHS (2015); Platts (2015); Bloomberg (2015).

3 High oil prices have tended to coincide with global economic and financial stresses World crude oil expenditure as a share of GDP Sources: IMF (2015) World crude oil expenditure estimated from world consumption at annual average market prices from BP Energy Statistics, World GDP

4 The resources boom The sector is transitioning through to the production phase, index 2012–13=100 Sources: ABS (2015) cat. 5206; ABS (2015) cat. 5625; ABS (2015) cat Terms of trade Investment Export earnings

5 Emerging economies to drive electricity consumption growth Electricity use and economic development Sources: World Bank (2015) World Development Indicators; International Energy Agency (2014), World Energy Balances.

6 Demand for every primary energy source is forecast to grow World primary energy demand forecasts (IEA New Policies Scenario) Source: International Energy Agency World Energy Outlook (2014)

7 The ‘golden age of gas’ will depend on future policies and prices IEA primary natural gas demand forecasts Source: International Energy Agency World Energy Outlook (2014)

8 The potential volatility of LNG supply exceeds total Victorian demand Forecast gas demand in eastern Australia Sources: AEMO (2014) Department of Industry, Innovation and Science Due to the scale of exports, small variations in LNG production can have a significant impact on the availability of production into the domestic market.

industry.gov.au Phone: industry.gov.au Phone: industry.gov.au Phone: 9 Mark Cully ​ (02) Department of Industry, Innovation and Science Chief Economist Contact