Australia's latest national accounts show why we probably would have had to be in recession to have seen an interest rate cut this year.
There is a cold, hard truth in the most recent economic growth numbers — governments are keeping Australia out of recession.Rising public demand has keep GDP growing in Australia for the past two quarters as the private sector shrinks.Take out the blue columns of public demand over the past two quarters and the economy would have shrunk.
— and total demand in the economy is still too high compared to its supply capacity. It thinks that's keeping inflation from falling faster.Both the jobs market and public demand are being propped up by record government spending, now sitting at 27.5 per cent of total economic output. "Restrictive monetary policy has clearly worked to slow private demand growth in the economy," he noted.
And, if the surge in migration across the Tasman Sea is any indication, a lot of New Zealanders are voting with their feet for the RBA's strategy, rather than the scorched earth approach to tackling inflation taken by the Reserve Bank of New Zealand. Angus Taylor says the Coalition wants to reduce government spending and red tape to revitalise the private sector."The only plan Labor has is for a big Australia, a big government with big spending. The treasurer's addiction to spending is sending Australia broke," he argued.
"If our political opponents were in charge the economy would be weaker and household budgets would be under more pressure," Chalmers went on to argue. "This is largely thanks to a legacy of infrastructure investment to support the economy through the pandemic.
Angus Taylor GDP National Accounts ABS Australian Bureau Of Statistics Michele Bullock RBA
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