The following chart in yesterday’s Mid-Year Economic and Fiscal Outlook (MYEFO) nicely illustrates the two-speed economy:

Given the resources and resources-related sectors are around 15% of the economy, this chart suggests around half of Australia’s economic growth in the next two years is attributable to the resources sector.

Regarding the Government’s fiscal strategy unveiled in MYEFO, I think the cuts to the federal public service and baby bonus are necessary and desirable. In describing the cut to the baby bonus, the Government has introduced a new euphemism. It’s not a cut, it’s a reset, as in:

Resetting the Baby Bonus to $5,000 and pausing indexation will continue to deliver substantial financial support to new parents while ensuring the ongoing viability of the payment.

I can imagine the Hollowmen moment, somewhere in either Parliament House or down in the Treasury building, when they came up with that one.