More effort needed for GDP growth: ACCI

While the modest improvement in GDP growth in the September quarter is a positive sign the health of the Australian economy is improving, the Australian Chamber of Commerce and Industry is calling for a stronger national effort to increase productivity.

Despite challenging domestic and international economic conditions, today’s release of the September quarter National Accounts shows year-on-year growth in the Australian economy increased to 1.7% from a low of 1.4% in the June quarter.

“We need policy settings that encourage business to take risks and invest. It is essential for ensuring growth in the business sector to build economic momentum through 2020,” ACCI Chief Economist Ross Lambie said.

“Businesses need policies that assist them to lift productive capacity through investing in skills, technology and infrastructure. Government has a key role to play in lowering energy costs, cutting red tape and improving workplace relations to make it easier to do business and create well-paying jobs.”

Mr Lambie said it was important to note the Reserve Bank Governor Philip Lowe’s projections that the economy has reached “a gentle turning point”, with growth expected to pick up to a high of 3 per cent by 2021.

“The September GDP growth was propped up by strong export figures and we must continue to support our vital export effort. The Balance of Payments data released earlier this week showed the balance of trade surplus growing to a record $21 billion, providing a current account surplus of $3.2 billion in the 2019 September quarter, the highest in 46 years.

“Consumer spending remains one of the main factors holding back economic growth over the past year and an improvement in consumer confidence is key to stimulating the economy in the year ahead.

“The Mid-Year Economic and Fiscal Outlook, and the all-important Christmas retail sales period, will tell us more about how consumers are behaving and how the economy is performing. We encourage the Government to use that information in preparing the forthcoming Budget to build consumer and business confidence to strengthen growth in the Australian economy.”