Dollar's dive to lift resources, boost Canberra's coffers The US market has again been pushed into the red amid a Government shutdown, while the Australian market is looking to see improvement this morning. THE slump in the Australian dollar has supercharged the value of the resource boom, more than making up for an expected fall in the price of coal and potentially adding billions to the federal government's ailing bottom line. Australia should earn an extra $55 billion from resource exports over the next five years despite slower-than-expected growth in demand for Australian LNG, coal, gold and oil, the government's top forecaster of energy and minerals prices indicated yesterday. The Bureau of Resources and Energy Economics has downgraded the value of Australia's expected resource export earnings since its previous update in March by almost $US130bn over the five years to 2017-2018. However, it upgraded their local value by slashing the forecast for the Australian dollar -- currently trading near US94c, down 10 per cent from April -- by more than 15 per cent to US86c from next year. "A more rapid recovery in the US economy, a longer period of low interest rates in Australia and more rapid decline in the terms of trade could result in an (even lower) exchange rate," a report by the bureau said. "Growth in resource export revenue will be driven by two main factors: substantial growth in bulk commodity export volumes, particularly for LNG and iron ore, and a lower Australian dollar exchange rate," said Bruce Wilson, executive director at the bureau. Despite an expected near-20 per cent slump in the world coal price, the bureau expects the total value of resource exports, dominated by iron ore and coal, to surge by 11 per cent this financial year to $203.8bn and grow at an average annual pace of 7 per cent thereafter. "The outlook for Australia's mineral and energy exports remains positive," the bureau's report noted. Despite weaker than expected global demand, Chris Richardson, director at Access Economics, said the bureau's report encapsulated a rosier view of world resource prices than Treasury did in its pre-election fiscal outlook. "BREE doesn't calculate terms of trade numbers, but looking at what they expect for world resource prices it seems they are painting a more optimistic picture than Treasury has to date," he said. Treasury anticipated a 5.75 per cent fall in the terms of trade this financial year but the bureau's resource price projections for the year suggest a more benign decline near 2.5 per cent, assuming constant import and non-resource export prices. Analysis by The Australian based on Treasury's pre-election economic and fiscal outlook (PEFO) suggests the government could expect an extra $7.2bn in tax revenues this year and next year alone, if the bureau's projections eventuated. Australia's iron ore export volumes are expected to grow by more than 10 per cent a year over the next five years, underpinned by new mines, including Fortescue's Chichester and Solomon projects in Western Australia. LNG exports are expected to grow more than 35 per cent a year and exceed the value of coal exports by 2017. The budget benefit of better terms of trade excludes the benefit of a lower currency. Mr Richardson said a US1c drop in the value of Australia's dollar tended to lift the budget bottom line by roughly $300 million.