The country is facing a $14 billion pay cut with new forecasts of a sharp fall in expected exports of key minerals and energy.
The Bureau of Resources and Energy Economics, in its June quarter update, said today it expects total exports to reach $196 billion in 2013-14. For the coming year it believes exports will hit a record $201 billion.
But the forecasts are down on the bureau’s March predictions.
The latest predictions are $3.1 billion lower for the current financial year and $13.9 billion down on 2014-15.
The decline is being driven largely by a drop in the price of iron ore and lower than expected exports.
The bureau believes iron ore will average $105.20 a tonne this year before dropping down to $96.50 a tonne in 2015. In March it was forecasting prices of $109.90 a tonne and $102.80 a tonne respectively.
The total value of iron ore exports this year is now expected to hit an all-time high of $74.1 billion. In March, the bureau was forecasting exports worth $76.6 billion.
Metallurgical coal prices are also tipped to be lower than had been expected in March.
Exports of iron ore are tipped to be slightly better this year but slightly worse than forecast in 2015.
BREE deputy executive director Wayne Calder said the swing from mining construction to mining production was well under way.
“Australia is continuing to see the transition from the investment phase of the mining boom to the production phase,” he said.
“Throughout 2013-14 the production of key resources and energy commodities has increased, supported by continuing demand growth in key markets.”
Mr Calder said mining and resource firms would continue to face pressures to cut costs.
“Looking forward, price pressures will continue to impact of domestic producers in 2014-15 with falling commodity prices and a persistently strong dollar impacting on export values,” he said.
“This will draw a sharp focus towards managing costs and enhancing productivity in the sector.”