By Daniel Hunter

Falling iron ore prices are set to cost the Australian economy AUD$25bn (£13bn; $19bn) over the next four years, according to the country's Treasurer.

Iron ore is currently trading at $47 per tonne, down from $120 in 2013. And it is expected to fall as low as $35 a tonne in the near future.

Treasurer Joe Hockey told the Australian Financial Review (AFR) that his Budget, to be delivered in May, will be based on the anticipated fall.

"There seems to be no floor, we are contemplating as low as $35 a tonne," Mr Hockey told the AFR.

He explained that every $10 drop in iron ore prices costs the Australian economy AUD$2.5bn in revenue.