Trade surplus balloons above $3bn

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Australia has recorded its biggest-ever monthly trade surplus at more than $3 billion, buoyed by a further surge in coal and iron ore exports.

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The June trade balance of goods and services ballooned to a seasonally-adjusted $3.54 billion, almost doubling from the revised $1.81 billion posted in May.

The record figure gave the federal opposition an opportunity to attack the government’s proposed 30 per cent minerals resource rent tax.

There has been a massive turnaround in Australia’s trade position since March, when trade was showing a deficit of more than $1.5 billion, reflecting a sharp rise in coal and iron ore contract prices from April 1.

“The commodity price rises for iron and coal have clearly boosted exports,” National Australia Bank senior economist Spiros Papadopoulos said.

“The gains emanating from the boost to Australia’s terms of trade will only further support the economy in the second half of this year.”

A seven per cent rise in June exports mostly reflected a 13 per cent increase in non-rural goods, with metal ores rising 23 per cent, coal up 15 per cent and other mineral fuels up 11 per cent.

Imports were flat in June.

Opposition Leader Tony Abbott said the nation’s prosperity, such as it is, is largely based on the success of the mining industry.

“That’s why it is the very midsummer of madness to clobber this successful industry with a great new big tax that even in its revised form will make Australian mining taxes the highest in the world,” he told reporters in suburban Brisbane.

Still, while the mining industry is enjoying the good times, other data showed that business overall has been unsettled by the rapid rise in interest rates earlier in the year and an uncertain global economy.

The Commonwealth Bank-Australian Chamber and Commerce and Industry’s (ACCI) business expectations survey released on Wednesday showed that most components of the report declined in the June quarter.

Its business conditions index eased to 53.7 points from 55.4 points in the March quarter, while economic performance expectations fell to 56.4 points from 60.7.

However, both held above the crucial 50-point level that separates growth from contraction.

“Mainstream business is still facing a challenging economic period,” ACCI director of economics and industry policy Greg Evans told reporters in Canberra.

The Reserve Bank left the official cash rate unchanged for a third straight month after Tuesday’s board meeting, having raised it six times between October last year and May.