June 2021

The Australian economy is on track

Yesterday the Australian Bureau of Statistics released the national accounts for the past quarter, and the data released shows that the Australian economy is now larger than its precoronavirus pandemic size after real GDP increased by 1.8 per cent in the March quarter. That's a third consecutive quarter of growth in the Australian economy and the most sizeable growth in three consecutive quarters since 1968, over 50 years ago.

This means we're continuing to lead the world in our recovery from the coronavirus pandemic and the recession. Between December 2019 and March 2021, our economy has grown by 0.8 per cent, which means we are larger now than when we went into the pandemic. If you compare us with other major advanced economies—the United States, the United Kingdom, Canada, France, Germany, Japan, Italy—you see all of these economies have contracted since the pandemic. The Australian economy is the only one that has grown. Importantly, this is translating into jobs. Today in Australia we have 46,000 more Australians employed and in work than we did going into the pandemic. Unemployment is down to 5.5 per cent. There are now 13,046,000 Australians in work, more than we had in March 2020.

This is no cause for complacency. As we've seen around the world, with Europe going into a double-dip recession and even countries that have high vaccination rates experiencing high rates of COVID incidence, hospitalisations and even, unfortunately, deaths, we've got a long way to go yet till we're out of the woods. But our government is committed to coming out of this crisis stronger than we were before, and Australia's economic recovery is something that we should all be very proud of.

I want to go into the national accounts figures in some detail because I think they're important. Private investment—this is businesses investing—is up 5.3 per cent for the quarter. We've seen machinery and equipment investment at its strongest quarterly growth rate since 2009. Together, private investment contributed 0.0 percentage points to growth. Dwelling investment is up 6.4 per cent. This is people building or expanding their homes. That's the third consecutive quarter of growth in dwelling investment. Household spending is up 1.2 per cent, contributing 0.7 percentage points of growth.

What we see here is that it's very much the private sector leading our economic recovery, which is as it should be. More than eight out of 10 jobs in Australia are in the private sector, and we see here with this recovery that it's private businesses, households, entrepreneurs and investors who are leading our way out of this recovery.

This shows you that our economic recovery plan is working. As we announced in the budget just recently, we're supporting household incomes through measures like the low and middle income tax offset, extending that for another year. We're encouraging businesses to grow and invest through measures like the instant asset write-off, through extension of the loss carry-back provisions and through expanded apprenticeship schemes. Finally, we're also investing in the industry of the future, with the R&D tax incentive going out at record amounts, with changes to employee share ownership program schemes to encourage start-ups to reward employees in this way and with a new patent box innovation, which should drive more investment into emerging technology sectors.