Federal Treasurer Josh Frydenberg has toned down his bragging about economic recovery lately, with the Financial Review on 3 September 2019 reporting that:
Treasurer Josh Frydenberg concedes the nation's economic growth for last financial year will be poor but believes activity will pick up in the September quarter because of cuts to income taxes and interest rates.
Fearing a growth number as low as 1.4 per cent for year ending June when GDP figures are released tomorrow, the Treasurer blamed several factors for what will be a sluggish quarter, including the election campaign.
He blames everyone but the federal government of which he is a senior cabinet minister for the following........
On 4 September 2019 the Australian Bureau of Statistics released its 5206.0 - Australian National Accounts: National Income, Expenditure and Product, Jun 2019.
The opening lines of its media release stated:
The Australian economy grew 0.5 per cent in seasonally adjusted chain volume terms in the June quarter 2019 and 1.4 per cent through the year, according to figures released by the Australian Bureau of Statistics (ABS) today.
Chief Economist for the ABS, Bruce Hockman, said: “The external sector drove GDP growth this quarter, while growth in the domestic economy remains steady”.
The National Accounts release was accompanied by this graph which shows that, despite this June quarter 2019 growth, GDP growth is the lowest it has been in the last eleven June quarters:
Interactive graph from https://www.michaelwest.com.au
It is hardly a coincidence that GDP growth has a sharp downward trajectory, given that once Liberal MP for Cook Scott Morrison became prime minister he spent most of his time between August 2018 & May 2019 in continuous election mode whilst presiding over a virtual policy vacuum.
In June quarter 2019 new and used dwelling investment continued to decline, the household saving ratio fell to the lowest its been since 2008, while the small growth in household consumption was the second lowest its been in the last eleven June quarters.
Although mining activity picked up, mining gross value added as a percentage of GDP was almost half of what it was in 2014 and mining investment in dollar terms was the lowest it had been since the June 2011 quarter.
If it wasn't for government expenditure between April and June 2019 then GDP growth would be even slimmer. Even then, neither Prime Minister Morrison nor Treasurer can claim expenditure figures as entirely the result of federal spending because it was state and local governments which did most of the heavy lifting.
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