'It's the Boom Times Baby - Why So Sad?'

AUSTRALIA'S top book keeper today asked the nation, Why are you so gloomy. 

• Aussies are acting like this is Greece
• We have a "surprisingly bright" future
• Some areas are under stress however

 The national economy has "an incredibly bright future," Secretary of the Treasury Martin Parkinson told a Senate estimates committee today.

Australians had "a lot to be optimistic about", but there was an overwhelmingly negative sense dominating the view of the economy, "as if we live in Greece".

We are enduring "the boom with gloom," Dr Parkinson said.

It was an upbeat projection of the economic fate of Australia at a time when job losses in airlines, the finance sector and manufacturing are painting dismal forecasts by some observers.

And it clashed with the Opposition's claim that the introduction of carbon pricing from July would cost jobs and close down companies.

"If you look at business and consumer confidence they are surprisingly low given the set of circumstances confronting Australia," said Dr Parkinson.

"I'm not in any way attempting to downplay the fact there are parts of Australian business that face very serious challenges in terms of transforming to gain advantage from the opportunities open to us.

"But I do think the whole mind set is overdone. It's almost as if most Australians think we live in Greece. We don't. We actually have an incredibly bright future ahead of us.

"Yes there are challenges, but there are always challenges. The opportunities we have in front of us are of a sort we've never seen before."

Under questioning, Dr Parkinson said his personal thinking was "somewhat surprising that there isn't, in a sense, more focus at the national level, at the opportunities open to us".

"But there is an overwhelming negative sense about much of the national discussion and debate...
Yes we have a multi-speed economy at the moment and there are some parts that face significant challenges but Australians have a lot to be optimistic about."

Dr Parkinson said governments here and overseas had to decide on a trade-off of new wealth and the need to improve the nation's health, welfare and environment.

"The classic question raised in China is: Do we wait to get rich before we address these challenges, or do we do them as we try and get rich," he said.

"And it's a question that every country faces."

Alumina Rejects Wagerup Carbon Tax Claim

Alumina Ltd says the high cost of construction in Western Australia rather than the carbon tax is a key reason that the expansion of its Wagerup alumina refinery has stalled.

WA's Environmental Protection Authority on Monday granted AWAC, Alumina and Alcoa's joint venture company, an extension until September 2016 to substantially commence the expansion that was first given environmental approval in 2006.

The Australian newspaper this week reported an Alcoa spokeswoman as saying the company would not revisit the expansion until it had a clearer picture of the full impact of the carbon tax, due to start on July 1.

The media report also cited the need to secure energy supplies, which Alumina chief executive John Bevan concurred with on Thursday.

But, Mr Bevan said, it was 'not the case' that the carbon tax was the key reason the project was not yet going ahead.

'The capital cost of building in WA is high, as seen with BHP's Worsley (refinery),' Mr Bevan told a conference call for analysts.

The cost of expanding BHP Billiton's Worsley alumina refinery in WA has blown out substantially due to factors including inflationary pressures and the stronger Australian dollar.

This had prompted analysts to speculate recently that the asset may be sold by the mining giant.

Alcoa last week announced that AWAC could close one of its two Australian aluminium smelters, Point Henry in Victoria, in the face of continuing difficult global economic conditions for the industry.

The company warned in January that it planned to close or curtail about 12 per cent of its global smelting capacity to improve its competitiveness amid falling aluminium prices and escalating raw materials costs.

The Point Henry announcement triggered a parliamentary furore, with federal Opposition Leader Tony Abbott blaming the possible closure on the government's carbon tax.

Prime Minister Julia Gillard labelled his comments a disgrace given that 600 jobs at the smelter hung in the balance.

'It (the potential Point Henry closure) is really not firm at this stage,' Mr Bevan said on Thursday, adding that Alcoa's global curtailments would occur in the next four or five months.

In delivering a near fourfold surge in full-year net profit on Thursday, Alumina said costs at Point Henry and its other aluminium smelter in Portland, Victoria, were last year pushed up by increased alumina and coke prices, and the rising Australian dollar.

Alumina booked a net profit for the 12 months to December 31 of $US127 million ($A119.16 million), up from $US35 million ($A32.84 million) for the 2010 calendar year.

Mr Bevan said margins rose after the company moved to price some of its alumina on an index/spot basis.

Morningstar analyst Mark Taylor said a 55 per cent rise in underlying earnings to $US128 million beat the investment research firm's forecast of $US113 million ($A106.02 million).

The company to maintain its full year dividend at six cents per share.

Mr Bevan said the company was cautious on the outlook for 2012, reflecting volatile pricing conditions, a strong Australian dollar and high input costs.

Conditions deteriorated towards the end of 2011, with prices for Alumina's products falling significantly.

Shares in Alumina closed up 1.5 cents, or 1.3 per cent, at $1.17.

Alumina Rejects Wagerup Carbon Tax Claim