John Williams NSW, National Party
2:14 pm
My question is to the Assistant Treasurer, Senator Sinodinos. Can the Assistant Treasurer update the Senate on the state of the Australian economy?
Doug Cameron NSW, Australian Labor Party, Shadow Minister for Human Services
Not as good as it should be, because of you lot!
John Hogg President
Order! You are actually entitled to be heard in silence, Senator Sinodinos.
Opposition senators interjecting—
When there is silence on my left, we will proceed.
Arthur Sinodinos NSW, Liberal Party, Assistant Treasurer
2:15 pm
I thank the honourable senator for his question. When it comes to having a strong economy, the Liberal and National parties are a unity ticket.
Unidentified interjection - Hansard doesn't record who said this
Honourable Senators:
Honourable senators interjecting—
Arthur Sinodinos NSW, Liberal Party, Assistant Treasurer
Today's national accounts were for the September quarter, and they reveal an economy—
Honourable senators interjecting—
John Hogg President
I remind honourable senators, if you wish to debate the issue, the time is after question time. When there is silence on my left, we will proceed.
Doug Cameron NSW, Australian Labor Party, Shadow Minister for Human Services
You've got a demilitarised zone there, a DMZ!
Doug Cameron NSW, Australian Labor Party, Shadow Minister for Human Services
A DMZ! Look at it! They're all mates!
Arthur Sinodinos NSW, Liberal Party, Assistant Treasurer
These are the September quarter national accounts, the last quarter of accounts under the previous government, and this is the legacy that Labor has left us, with growth continuing to be below trend—0.6 per cent for the quarter, 2.3 per cent through the year. This is the fourth consecutive quarter of below-trend growth. For a number of years, we heard from the other side about trend growth and all the rest of it. That was masking weakness in the non-mining economy. These latest statistics underline that, as mining investment continues to come off, that weakness in the non-mining economy is coming through.
The major source of growth in the quarter was an increase in net exports, which we welcome, contributing 0.7 percentage points to GDP. That growth in export volumes is important. In the years to come, that will be the pay-off for the large supercycle of resource investment which we have had, but it does mean we are in a transition, and those exports will not make up for the impact on GDP of falling mining investment, so we need to continue the transition to a stronger economy. Household consumption remains subdued, contributing 0.2 percentage points to GDP growth in the quarter. Saving levels remain elevated, at over 10 per cent of GDP. Consumers remain cautious. Non-mining investment—
Jacinta Collins Victoria, Australian Labor Party, Shadow Cabinet Secretary
Take a breath, Arthur!
Stephen Conroy Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate
Full stop, full stop, comma, comma!
Opposition senators interjecting—
John Hogg President
Order! Senator Sinodinos, you are being interrupted again. It is not fair. Those on my left, I remind you it is disorderly to engage across the chamber when a minister is answering the question.
Arthur Sinodinos NSW, Liberal Party, Assistant Treasurer
There is fairly weak business investment, and this is before the economy was hit by the full impact of the fall in mining investment. Mining investment is expected to fall from eight per cent of GDP to around three per cent of GDP over the next two to three years. That is a very big transition. Wages growth remains soft. (Time expired)
John Williams NSW, National Party
2:19 pm
Mr President, I ask a supplementary question. What implications does this have for the budget bottom line?
Arthur Sinodinos NSW, Liberal Party, Assistant Treasurer
This release, along with other information we have had since the election, indicates that the budget has continued to deteriorate from where it was in the Pre-Election Economic and Fiscal Outlook. It was important that we get the September quarter figures before the Mid-Year Economic and Fiscal Outlook is finalised. It is in the process of being finalised as we speak, but there is some more information that will be required. We will outline the full state of the budget in the Mid-Year Economic and Fiscal Outlook, before Christmas.
Again, this illustrates the need to resolve matters like the debt limit debate. Nominal GDP, which is the growth in the value of GDP, continues to be relatively low, and that is leading to the revenue forecasts being put into some doubt. So, for us, the challenge in the period ahead is to manage the transition from the mining economy to the non-mining economy, making sure that our budget consolidation does not impact on the near-term growth of the economy. (Time expired)
John Williams NSW, National Party
2:20 pm
Mr President, I ask a further supplementary question. What is the Abbott-Truss government doing to improve the economy?
Unidentified interjection - Hansard doesn't record who said this
Opposition Senators:
Opposition senators interjecting—
Stephen Conroy Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate
But they won't stop laughing! The Liberals won't stop laughing!
John Hogg President
Senator Conroy, stop interjecting. I draw the attention of those on my left to the need to be silent.
Arthur Sinodinos NSW, Liberal Party, Assistant Treasurer
2:21 pm
We are making the tough decisions to get the budget back into balance and reduce taxes in the economy by taking the burden off business and taxpayers. This chamber can assist in that regard by abolishing the carbon tax, abolishing the mining tax and supporting our proposals to reduce red tape so we have one-stop shops for environmental approvals. We have already taken decisions to remove the fringe benefits tax on cars, one of the biggest hits on the car industry in recent years. All of you opposite who claim to be protecting the car industry, shame on you for putting the fringe benefits tax on cars and particularly hitting the charitable sector of the economy. We are providing certainty by getting resolution of 96 announced but unenacted measures left over from the government of the people opposite. And, yes, the Abbott-Truss government has a $20 billion infrastructure program which will deliver productivity increases in the economy. (Time expired)