Ken Ticehurst (Dobell, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer inform the House of the recent data regarding developments in the Australian economy?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Dobell. I can inform the House that this morning the ACCI and St George Bank released their business expectations survey, which shows that business conditions improved significantly in the June quarter and are at their highest level in eight years. The index improved from 58.5 points to 60.5 points. Expectations also rose strongly to near record levels, which, the ACCI noted, indicates excellent conditions ahead. The survey showed that investment in plant and equipment rose strongly and is at its highest level since the survey began. This comes along with the NAB quarterly business survey, released for the June quarter, which shows that business conditions rose three points and expectations for the three months ahead are now at record levels.

What is significant about this is that this is coming at the end of the longest period of continuous growth in the Australian economy ever recorded. We are now in the longest continuous growth period ever recorded and yet business is still reporting near record expectations. This long expansion in the Australian economy is responsible, along with the government’s economic reforms, for 2.1 million additional jobs having been created in this country and for inflation during this long period of expansion being within our band of two to three per cent. In fact, the consumer price index to June was 2.1 per cent higher.

The major contributor to that increase in the consumer price index was fuel prices, coming off record world oil prices. But the good news is that the average petrol price in July was lower than the average price in June, meaning that petrol is now at its lowest price in four months—and, far from contributing to inflationary pressures, as it did in the June quarter, the fall in petrol prices, if it continues for the remainder of this quarter, should actually detract from the consumer price index.

The government’s policy, which has been to balance the budget, pay off debt, reform the tax system, improve industrial relations, improve the productivity on Australia’s wharves and improve the welfare system to encourage people out of welfare and into work, has now contributed to the longest period of economic expansion in Australian history, job creation at a level we have never seen and unemployment now at 33-year lows—and it has been done consistently with a low inflation rate of two to three per cent.

This does not mean that there is not more to be done—of course there is more to be done. But this is the government that pioneered those reforms that have got us to where we now are and this is the government that will take us on to those reforms in the future.