Monday’s glittering tax cuts unfortunately (depending on your politics) overshadowed any number of interesting figures and forecasts tucked away in the Treasury’s mid-year economic and fiscal outlook – things like the prediction that BHP is going to be stuffed in three years’ time.

According to the Treasury and/or Treasurer:

Iron ore and coal prices are assumed to return to their long-run average level over the two projection years (2009-10 & 2010-11). This is broadly consistent with aggregate non-rural commodity prices retracing almost 50 per cent of their recent gains by the end of the projection period.

“Almost 50 per cent” sounds pretty much like the 48 per cent profit margin presently being enjoyed by the folks with shovels at BHP. Gee, I wonder what happens to tax cuts if the Australian mining sector falls in a heap in three years time, just when the major companies are smack in the middle of massive capital expenditure programs.

But then again, Peter Costello might be wrong – he has been before. He gave the SMH an exclusive interview on November 1 last year and called the commodities boom over then.

Certainly BHP’s new boss, Marius Kloppers sounds more optimistic. When you’re looking at a $50 billion capex spend, you’d want to be.

The AFR reports that Kloppers told a Melbourne UBS lunch: “It would be difficult for me to see, in this current environment… a series of events that would make me worry about margin compression.”

And that was about his most understated statement. Less than a month ago BHP slightly disappointed the market by “only” upgrading the Olympic Dam resource by 75 per cent. Maybe that figure was just a remnant of the conservative Chip Goodyear culture as Marius is very happy to talk it up. Forget that 75 per cent figure.

“Exploration of Olympic Dam is by no means complete and the size of this resource will continue to go up,” he said. “We believe this ore body is second in size only to Nirilsk in Russia and there’s no reason, if we keep exploring it, why it can’t become the largest in the world.”

There you go – the world’s biggest with no end in sight. BHP will be investing in Olympic Dam “for generations”.

So who do you believe, Peter Costello or Marius Kloppers? The big difference is that there are laws and regulators that are supposed to keep one of them honest and the other one’s a politician.