We estimate it has increased our real income by an amount equivalent to about 1½ percentage points of GDP on average in each of the last two years and more is to come.1 Some of this accrues to workers in the resource sector, some to domestic shareholders and a significant amount through increased taxation and royalties to governments.
When the additional income is spent, it provides a significant boost to domestic demand through increased consumption and investment as well as via the government sector, although some flows overseas through imports. In the past, we have sometimes had difficulty in coping with these expansionary effects, as they pushed up inflation and added to the boom and bust character of the Australian economy.