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This One Graph Explains Australia’s Rooted Budget Position

Goodbye Iron ore price, we hardly knew ye.

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The plummeting price of iron ore around the world has come to define the federal government’s biggest budget problem. This graph shows it’s spectacular free-fall in action.

Dennisvdw / Getty Images

The graph, prominently displayed in budget documents shows the price for a tone of iron ore plummeting from over $120 at the start of last year, to less than $60 in May this year.

According to the Treasury it blew a huge $20 billion hole into this year's budget - the largest single contributor to Australia's falling fortunes.

"On the economic front, iron ore prices have fallen dramatically and the recovery in the global economy has been weaker than expected," said treasurer Joe Hockey in his budget speech on Tuesday night.

He tried to remain upbeat, but repeatedly warned the the iron ore price has been the one thing that has hit the "budget repair job" the hardest.