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Australia’s economic growth worse than Greece

AUSTRALIA'S economic growth this year is expected to be slower than that of Greece as the International Monetary Fund (IMF) slashes forecasts.

The World Economic Outlook, released today, predicts Australia to grow at 1.7 per cent in 2019, down from a predicted 2.1 per cent.

Growth this year is now expected to be slower than the US, Spain and Greece.

Global growth for 2019 is down to 3 per cent, from a predicted 3.2 per cent.

Treasurer Josh Frydenberg reminded Australians they are in the 29th consecutive year of economic growth - a feat no other country has matched.

"But we do face headwinds with the IMF World Economic Outlook confirming that global economic growth has slowed with 'rising trade and geopolitical tensions taking a toll on business confidence, investment decisions, and global trade'," Frydenberg said.

"The IMF forecast Australia to grow faster than any G7 economy over the next two years except the United States.

 

Treasurer Josh Frydenberg said Australia must stick to its economic plan. Picture: Kym Smith
Treasurer Josh Frydenberg said Australia must stick to its economic plan. Picture: Kym Smith

 

"But the international challenges are a stark reminder of why we must stick to our economic plan, which will deliver lower taxes so Australians can keep more of what they earn."

The IMF also predicts Australia's economy will grow 2.3 per cent in 2020 - down from a predicted 2.7 per cent in the April forecasts.

Labor shadow treasurer Dr Jim Chalmers said the drop in Australia's growth forecast was a sign the economy was flagging.

"(It) is larger than the downgrade to global growth and four times as large as those for the euro area and advanced economies as a whole," he said.

He noted the IMF had also called on countries including Australia to provide fiscal stimulus and invest in infrastructure to support the economy and improve productivity.

Australia has so far been a big winner of the global slowdown sparked by the US and China's trade war, with China spending on infrastructure and buying raw materials from Australia.

 

Shadow Treasurer Jim Chalmers has criticised the government’s economic plan. Picture: Lukas Coch
Shadow Treasurer Jim Chalmers has criticised the government’s economic plan. Picture: Lukas Coch

 

But the IMF warned against relying on interest rate cuts to boost economies, and argued for government to spend some money.

"Monetary policy cannot be the only game in town and should be coupled with fiscal support where fiscal space is available," the report said.

Former treasurer Peter Costello said monetary policy has "run its race".

"Whether the cash rate is .75 per cent, whether its .5 per cent, whether it goes lower than that. I just don't think there's much stimulation left in monetary policy," he said today.

Costello said he believed further rate cuts wouldn't make a difference.

Chalmers said the updated forecasts made a mockery of Frydenberg's claims that the government has the right policy settings for the economy.

During Question Time yesterday, Chalmers asked Prime Minister Scott Morrison about the country's economic growth to which he replied Australia was the "second highest" of the G7 countries.

Morrison said his government took to the election: "a plan to lower taxes, to ensure that we are cutting the cost of doing business in this country … developing new export markets and that we are investing in the infrastructure that Australia needs to grow."

He then took the opportunity to slam the opposition being consumed by their "climate change fight club".

"The thing they have forgotten about climate fight club is you are not supposed to talk about it. They can't help talking about it," Morrison said.

Morrison boasted that 1.4 million jobs had been created under this government, but a new Anglicare report has shown for some vulnerable groups, getting a job is harder than ever.

 

Prime Minister Scott Morrison during Question Time in the House of Representatives at Parliament House in Canberra. Picture: Mick Tsikas
Prime Minister Scott Morrison during Question Time in the House of Representatives at Parliament House in Canberra. Picture: Mick Tsikas

The report shows older, younger and disabled workers are competing against five other applicants for every low-skilled vacant job in Australia.

Unemployed jobseekers who already face barriers to enter the workforce are competing against at least five other applicants for every low-skilled vacant job in Australia.

A further 1.16 million people are underemployed and looking for more hours or vacant full-time jobs.

Anglicare's Jobs Availability Snapshot shows workers without qualifications or work experience, or who have other barriers to working, are struggling the most as they try to get into the workforce.

"Our system is failing those who need the most help to find work," Anglicare's Kasy Chambers said today.

"These might be people with disabilities, who didn't finish Year 12, or older workers who lost their jobs later in life.

"Our research shows that at least five of these jobseekers are competing for each job at their level.

"There aren't enough jobs at this skill level to meet demand in any part of the country."

Jobs they're competing for include cleaners, laundry workers, office administration, farm work, food preparation, labouring and sales work.