Mark Baker (Braddon, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer inform the House of recent economic data? What does this indicate about the strength of the Australian economy?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Braddon for his question. I can inform him that the national accounts showed that the Australian economy grew 0.9 per cent in the June quarter and 4.3 per cent through the year. This is very strong growth, and we should bear in mind that there is a sector of the Australian economy that is still doing it very tough—that is, the farm sector. In year average terms, GDP fell 19.2 per cent in 2006-07. The Australian economy is being led by investment, with new business investment up 13.3 per cent higher through the year, strong growth in engineering construction and strong growth in machinery and equipment. The outlook for business investment remains positive, with around $23 billion worth of engineering construction projects having been commenced but not yet completed.

Members of the House will also note that productivity has increased by 1.2 per cent to be three per cent higher through the year. So we are now seeing what was expected. With an increased investment it takes time before you actually get production flowing from it. Now that we are starting to get production flowing from that investment, productivity is growing strongly. The labour force is also strong, with jobs being created in the month of August at around 1,000 new jobs a day. That is in net terms. After jobs that were lost, there was a net increase of about 1,000 a day in August and, over the last year, 270,000 new jobs.

Members of the House will have heard the Canadian Prime Minister address us recently. He said in his speech:

I know that Australia has been on a prosperous roll for a decade. I urge you, as I urge my countrymen, to never think that that happened by accident. It had everything to do with prudent policy choices, far-sighted leadership and careful fiscal management.

An economy does not run itself, and any person who thinks that it does falls into the trap of threatening the management and the future of Australians right at the time when it would be most dangerous. As the Canadian Prime Minister said:

I believe that one of the great dangers facing both of our countries today is complacency ... because ... our citizens have long forgotten, or have never experienced, economic recession. But we cannot take our continued prosperity for granted.

The last recession we had in this country was in the early 1990s under the Labor government. We have managed to grow continuously since then but we cannot afford to be complacent, and any so-called leader who tells you that all of this happens without hard work and tough decisions is somebody who does not understand the Australian economy.