Chinese tensions leading to iron ore price collapse would be an ‘economic disaster’

The budget's assumption that future iron ore prices will collapse raises questions about whether the government believes "tensions with China" will affect Australia's key mining industry, says Sky News Political Editor Andrew Clennell.

A key assumption of Tuesday night’s budget was that iron ore prices would drop to around $50 down from current levels of over $230 a ton.

Last year’s pandemic budget assumed iron ore prices would not experience a massive hike, but the price surge as well as increased Chinese demand left the budget with a $8.8 billion windfall.

Mr Clennell said the fact this year’s budget assumed the prices would fall indicated there was an “anticipation that tensions with China will affect that”.

“If it did, it would be an economic disaster for the country.”

Видео Chinese tensions leading to iron ore price collapse would be an ‘economic disaster’ канала Sky News Australia