Michael Keenan (Stirling, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Prime Minister. What do the growth figures released today say about the current state of the economy, and what benefits will flow to electorates like mine?

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

I thank the member for Stirling for his question. The national account figures today show that, largely due to a change in inventories, there was some moderation of growth in the Australian economy during the June quarter. GDP grew by 2.7 per cent in the financial year, which is slightly higher than the forecast of 2.5 per cent in the recent budget, but through the year growth was 1.9 per cent. National income growth continues to be very strong, with real gross domestic income rising by 0.7 per cent in the June quarter, to be 3.3 per cent higher than a year ago.

Compensation of employees—in plain language, wages—grew by two per cent in the June quarter. Very interestingly, this is the first quarter under Work Choices, and wages have risen by two per cent. In the previous March quarter, they rose by 1.2 per cent and in the December quarter they rose by 1.8 per cent. I do not notice any evidence yet of those wages having been driven down as a result of Work Choices.

New business investment grew by 2.6 per cent in the June quarter, to be 11.8 per cent higher than a year ago. Growth has been particularly strong in engineering construction, which grew by 4.8 per cent in the June quarter, to be 21.6 per cent higher than a year ago. Dwelling investment rose by 3.7 per cent but remains four per cent lower than a year ago.

As I indicated, falls in inventories subtracted 0.8 of a percentage point from growth in the June quarter, and that run-down was very broadly based. Given the fall in the June quarter, it is fair to say that inventories are likely to add to growth in the next quarter.

We still have a very strong economy. The benefits of it are spreading all around the country—and nowhere more so than in electorates like Stirling. Unemployment is at a 30-year low. Wages remain strong. Job opportunities are there in abundance in many parts of Australia. I know the opposition will be disappointed, but more Australians have job opportunities now than in the lifetime of just about anybody in this House.