Colin Brinsden, AAP Economics Correspondent
(Australian Associated Press)
It used to be said cranes on the skyline were the sign of a strong economy.
But an upbeat Treasurer Scott Morrison has linked Australia’s highest level of economic growth in almost two years to a growing number of tradies’ utes on the road.
“Every time an Australian sees a ute driving around a suburb of one of our metro areas or regional towns with a phone number on the side, that’s the sign of a stronger economy,” Mr Morrison told reporters in Canberra on Wednesday as he presented the latest national accounts.
“We are seeing this played out with all of our trades, we’re seeing it played out across the economy.”
Annual economic growth has soared thanks to a rebound in exports in the first three months of 2018, after a subdued end to 2017.
Mr Morrison said there was also an encouraging trend in non-mining and business investment, including extra machinery, equipment and commercial vehicle sales, such as utes.
The economy grew by 1.0 per cent in the March quarter, which was double the rate of the increase in the December quarter.
This lifted the annual growth rate to 3.1 per cent – faster than most economists had predicted.
Commonwealth Bank economist Gareth Aird said it was even stronger than the Reserve Bank had been anticipating although he didn’t think it shifted the needle for a near-term rise in the cash rate.
“But it adds weight to the RBA’s view that the next move in rates is expected to be up rather than down,” Mr Aird said.
The treasurer said Australia’s growth was now above the OECD average and better than all the G7 nations.
“Australia has climbed back to the top of the leaderboard,” he said.
But shadow treasurer Chris Bowen pointed to sluggish consumption growth showing households continue to be under strain and underlining why the economic strategy of the government is wrong.
“Cutting wages, reducing penalty rates, emphasising corporate tax cuts and delaying personal income tax cuts to 2022 and 2024 when they could be delivering bigger and better tax cuts not only in 2018 but 2019 which is Labor’s plan,” Mr Bowen told reporters in Sydney.
Looking ahead, the treasurer said the health and medical sectors, defence industries and manufacturing would contribute to growth.
“They won’t be as employment-intensive as they were before, but they will be profit-intensive,” he said.
Mr Morrison, a keen rugby league fan, hopes NSW gets as decent a result in Wednesday’s State of Origin opener as the Australian economy.
“Apologies to Queenslanders listening.”