Australia's mining boom fueled by Chinese demand, which kept the economy out of recession during the global financial crisis, "is likely to be sustained for a very long period," Prime Minister Julia Gillard said Tuesday.
Gillard told a tax summit at Parliament House that the current boom in exports of iron ore and coal is different from previous cycles in Australian history that inevitably ended in busts.
"We are in a different economic phase and we shouldn't let the language of 'boom' deceive us," Gillard said.
"It is a boom, it is a huge opportunity for growth in our resource sector and great opportunities for jobs and wealth creation as a result, but it is likely to be sustained for a very long period of time," she said.
Gillard's prediction of prolonged Asian demand for Australian resources comes as Chinese efforts to curb inflation by tightening controls on bank lending raise worries that China's planners might overshoot their goal and slow the economy too much, especially if conditions in Europe and the U.S. deteriorate further.
The two-day tax summit fulfills a promise to independent lawmakers who demanded a wide-ranging review of Australian taxation in return for their agreement a year ago to support Gillard's minority government.
But the government has warned that key tax policies will not be changed, including a government plan to introduce a new tax on the burgeoning profits of iron ore and coal miners beginning July 1, 2012.
The government has also ruled out changes to plans to tax Australia's largest polluters for the carbon gases they emit _ also from July 1, 2012 _ and will not increase Australia's 10 percent consumption tax.
Growing Chinese industries' demand for raw materials has helped keep the Australian economy out of recession for 20 years. High prices for iron ore and coal is providing Australia with the largest monthly trade surpluses in its history.
Gillard said the boom was also creating a "patchwork economy" by pressuring the manufacturing, tourism and international education industries.
Manufacturing, retail and farming sectors battle to retain staff lured by the high wages in the resource sector. Australia's jobless rate is 5.3 percent.
Sectors outside mining and natural gas that are buoyed by Chinese demand are also struggling against an Australian dollar that has been mostly stronger than the greenback since reaching parity for the first time ever in October last year and against interest rates that have been kept relatively high by resource-fueled inflation fears. The key cash interest rate in Australia has stood at 4.75 percent since November 2010.