The recent slip in our terms of trade is a blip on the back of a mighty, historic rise. The chart shows the record to December 2008 (source here).
There’s certainly some more softening to come when the data for 2009 becomes available. But if there’s one thing that is working to our advantage in the current international slump it’s the historic level of our terms of trade. Australia’s export dollar continues to command a more imports it has in your lifetime or mine.
The Business Spectator interview is also notable for an admission that the Rudd cabinet simply ‘made up’ the budget for the National Broadband Network (NBN). It’s depressing to learn that policy-based evidence is still a feature of infrastructure planning.