While the increase in exports will support profits and, therefore, notional capital inflows to the mining sector, some of these profits are likely to be paid out to offshore owners as dividends rather than reinvested, an issue I will return to later when discussing the net income deficit.
Public Sector Turning to the public sector, foreigners have remained ongoing purchasers of Australian government debt, with the level of holdings continuing to rise over the past couple of years. Flows into government bonds have nonetheless moderated, and have not kept pace with the increase in net issuance.