Federal Treasurer Chris Bowen believes the latest national accounts highlight the challenges facing Australia as the economy moves from the mining investment boom to broader economic growth.
Even so, the data released on Wednesday shows the economy has grown continuously over the six years Labor has been in power “in the face of the most difficult global circumstances since the Great Depression”, he told Sky News on Wednesday.
The national accounts show the economy grew at a slightly stronger pace than economists expected – by 0.6 per cent in the June quarter and by 2.6 per cent annually.
While this was below the long-term trend of above three per cent, Prime Minister Kevin Rudd said the data still showed Australia’s comparative strength in an uncertain global economic environment.
A report by the Organisation for Economic Cooperation and Development on Tuesday found that while there has been an improvement in growth momentum among major economies, “a sustainable recovery is not yet firmly established and important risks remain”.
Mr Rudd said Australia had posted 22 years of continued positive growth – 11 under Labor.
“This is a good record for Australia,” he said.
“What I fear most of all is if the consequence of (Opposition Leader Tony) Abbott’s massive cuts, his hidden massive cuts, impact the health of our economy and run the risk of triggering a recession.”
But Mr Abbott called Labor the “recession experts”, noting the last one was under former prime minister Paul Keating.
He said growth remained subdued, demonstrating the need for a coalition government to abolish the carbon and mining taxes, cut red tape, and shift the industrial relations pendulum back to the sensible centre.
“This it what our country needs if we are going to have the growth and prosperity and the decent government services that people have a right to expect,” he told reporters.
Shadow treasurer Joe Hockey also pointed to the World Economic Forum’s latest global competitiveness report for 2013/14 in which Australia dropped one place to a ranking of 21.
Mr Hockey said that was influenced by wasteful government policy.
“The Australian economy continues to be fragile and business confidence remains below long term averages as business and consumers deal with a chaotic and dysfunctional government,” Mr Hockey said in a statement.
Australian Industry Group chief economist Innes Willox said there was also further slippage in cost competitiveness.
“These results highlight … the pressing need to improve key areas, including industrial relations, business regulation and company tax in order to lift our international competitiveness,” Mr Willox said in a statement.
Professional accounting body CPA Australia chief executive Alex Malley said the continued slide in competitiveness should be a wake-up call for urgent and decisive action by an incoming government.
“It shows that the election campaign’s fixation on costings has been at the expense of a genuine policy debate on substantive and necessary reform issues,” he said in a statement.