Go For Growth
Ross Greenwood: Good morning to you Lisa, Good morning everyone – best time of the day I’ve got to tell you.
It’s D-Day for the Australian economy today, actually GDP Day.
Today, our national accounts come as numbers come out.
Today we find out whether Australia’s equal the record for the longest period a major economy has gone without a recession.
Now, to be honest, the record means diddly-squat – really – what counts is your personal economy, at home or in your business.
And the truth is, we are going to limp to the line as a nation, not burst through it like Usain Bolt.
Australia, you see, has structural problems like the aging population.
Too much government spending, and too much household debt, and they’re holding our economy back.
The population and politicians, to frightened of changed to truly fix these problems, take the short-term pain in exchange for big benefits over the next 10 years.
So, today the latest forecast and Bloomberg survey of economists says Australia’s economy grew just 0.3 per cent in the first quarter – that puts annual growth at 1.6 percent.
That’s much lower than we need to pay off debt and create jobs.
Some, such as Capital Economics, are more gloomy – saying the economy could have gone backwards by half a percent.
In other words, one bad quarter away from recession.
The Reserve Bank, which kept rates on hold yesterday, thinks will grow two and a half to three percent this year.
Yesterday, governor Phillip Lowe said year-end GDP growth is expected to slowed in this March quarter.
Looking forward, growths expected to increase gradually over the next couple of years to a little above 3 per cen.
Now, the government the budget said the economy will grow 2.75 percent this financial year.
It said growths expected to rebound after slowing in 2016-17, as a result of weather related factors in early 2016-17, and more recently tropical Cyclone Debbie.
Poor Ole’ Debbie – she’s getting blamed for plenty, I otta tell you right now.
The OECD has it a more modest 2.4 percent this year, rising to 3 per cent next year.
But it warns that new reforms are needed to drive productivity, and to close the income inequality that’s widening in Australia.
In other words, that’s the haves and the have nots… we gotta to watch out.
The Dow Jones down 48. The Dollar 75.07 US Cents
The Income gap is widening.