Katina Curtis, AAP Senior Political Writer
(Australian Associated Press)
Treasurer Josh Frydenberg says Australia’s economic fundamentals are strong, even though the country has recorded its slowest pace of growth in a decade.
The economy grew by a mere 1.4 per cent in the year ended June and 0.5 per cent in the quarter, in seasonally adjusted terms, Australian Bureau of Statistics data released on Wednesday showed.
Growth was driven largely by a boost in exports of coal, iron ore and liquid natural gas, which contributed 0.6 per cent to GDP.
Mr Frydenberg noted the data did not take into account the full flow-through of the federal government’s income tax cuts and the central bank’s 50 basis points worth of interest rate cuts.
“It’s a reminder of the remarkable resilience of the Australian economy and a repudiation of all those who have sought to talk it down,” he told reporters in Canberra.
“The fundamentals of the Australian economy are strong.”
But there were still challenges facing the economy in terms of productivity and household consumption, which was softer than the government would like.
“We are having a discussion with key stakeholders about other ways we can boost investment, and those decisions will be decisions at budget time,” Mr Frydenberg said.
As well, Prime Minister Scott Morrison has written to the states about bringing forward infrastructure spending.
Ahead of the release of the growth numbers, Mr Morrison said his government had a long-term plan to support the economy.
“Yeah, the numbers today will be softer. That will come as no surprise to me,” he told reporters in Melbourne.
“These circumstances are circumstances that were taken into account in the May budget.
“We will implement that plan and monitor closely its impact across the economy in the months ahead.”
The weak growth figures – which come on on top of Tuesday’s weak retail sales result – have been seized on by Labor as evidence the government’s policies aren’t working.
“This is the inevitable consequence of a government which has a political strategy but not an economic plan to turn things around,” shadow treasurer Jim Chalmers told the ABC.
Retail spending fell by an unexpected 0.1 per cent in July, missing forecasts of a 0.2 per cent rise.
The Australian Taxation Office told AAP it had now received more than 7.8 million individual 2018/19 tax return lodgements – a 15 per cent increase from the same time last year.
“We have issued over 5.5 million individual 2019 income tax refunds with a total value of over $14.2 billion,” an ATO spokeswoman said.
The Reserve Bank of Australia, which kept its key cash rate on hold at one per cent on Tuesday, has flagged it could ease rates further “if needed to support sustainable growth”.