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Did BHP and Rio Tinto just make you $500 richer?

I have never invested in BHP Group Ltd (ASX: BHP) shares or Rio Tinto Limited (ASX: RIO) shares, but it’s quite possible that they may have made me and every working Australian $500 richer.

You may have seen that the government just increased the tax offset for most Australian full time workers by just over $500. Sure, you might say it’s a cynical attempt to buy votes just before an election. But it might be a clever way to put money back into Australian hands to get them spending.

It’s not as though the initiative is unfunded. We are apparently just one year away from reaching a budget surplus. Where has all of this extra money come from? One of the biggest contributors has been the Australian resources sector, led by BHP and Rio Tinto – which is why their share prices are getting closer to their all time highs.

According to stats released today, Australia just achieved a seasonally-adjusted record trade surplus of $4.8 billion in February 2019. Economists were only expecting a surplus of $3.7 billion.

Rising commodity prices could provide even more impetus for Australia’s financials.

It is amazing how BHP, Rio Tinto, Fortescue Metals Group Limited (ASX: FMG) and a few others can have such a large impact on whether Australia’s budget is in the black or not.

I can’t ever see myself investing in BHP, but I am benefiting from it with Treasurer Frydenberg offering to make Australians $500 better off largely because of the contributions of the resources sector.

Foolish takeaway

The mining boom saved Australia during the GFC and a decade later it could be a key reason why Australia may avoid a recession again, or at least have a much softer landing.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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