Today's March Quarter National Accounts show continued growth in our economy, with real GDP growing by 1.1 per cent in the March quarter and by a strong 3.1 per cent through the year, in line with the Budget forecasts.
We continue to grow faster than the United States and the United Kingdom, more than twice the rate of Canada - a comparable resources economy - and still well above the OECD average.
The National Accounts also confirm that Australia’s economy is at a very sensitive stage in our transition from the mining investment boom to a broader and more diversified economy.
There have been some encouraging signs that we are successfully transforming our economy. At the same time, our national accounts data highlights some vulnerabilities, demonstrating that we cannot take any growth for granted and how crucial a national economic plan for jobs and growth is for our future.
It is critical that we maintain our hard won momentum and continue to successfully make this transition through the implementation of our plan for jobs and growth.
Australia needs an economic plan that encourages investment to support growth and promote the creation of the new and better paying jobs of the future.
Treasury modelling has confirmed that the Turnbull Government's Enterprise Tax Plan will grow the Australian economy, increase employment and increase wages. The economic growth we are promoting through our national economic plan was once supported by the Labor party. But for political opportunism Labor now recklessly oppose what is needed to drive economic growth.
In a competitive and uncertain global economy we cannot expect a second chance should we make choices that put our economy and transition at risk.
Labor's rush to increase taxes and increase spending by an even greater amount will only serve to undermine everything Australians are working hard for and put their jobs and the businesses that employ them at risk.
Not only is Labor spending money it doesn't have on promises it can't keep, Labor is not focusing on the drivers of economic growth that will ensure we can sustainably fund critical services and welfare.
The sensitive stage in our economic transition and development demands a plan that supports hardworking Australians, one that builds confidence and economic activity, not irresponsible proposals to swamp enterprise and discourage effort, as Labor's $100 billion in new and higher taxes over the next ten years would do.
The National Accounts show household consumption, dwelling investment and net exports are contributing positively to real GDP growth in the quarter.
Household consumption rose 0.7 per cent in the quarter and contributed 0.4 percentage points to growth. Dwelling investment rose by 1.4 per cent in the March quarter to be 7.0 per cent higher through the year. Labor’s housing investment tax is a key risk to this sector of the economy, as it is to consumer confidence.
Net exports contributed 1.1 per cent to GDP growth in the March quarter. Exports volumes grew by 4.4 per cent driven by strong growth in mining exports as the industry shifts from the investment phase to the production phase. Imports are down from falls in capital goods, partly offset by a rise in services imports. Overall, this reflects our ongoing successful economic transition.
Services exports also contributed to this strong export result growing 6.1 per cent in the quarter and 14.1 per cent stronger over the year. Australians are taking advantage of the 19,000 distinct trade opportunities in our export trade agreements.
The strong export result has occurred during a period of declining terms of trade, falling 1.9 per cent through the quarter reflecting lower world commodity prices.
The recovery in non-mining investment remains slower than expected. The pace and timing of growth in non-mining investment remains a key source of uncertainty as the economy transitions from capital-intensive resource investment to labour-intensive services sectors. While mining still provides the largest contribution of 0.5 percentage points to growth in the quarter, this is now nearly matched by services at 0.4.
That is why we are supporting businesses to invest and grow and why we oppose Labor’s proposal to increase the tax on investment by 50 per cent. Taxing investment will further hinder growth.
Treasury modelling released in February found that simply taxing and spending has a negative drag on our economy. Labor's higher taxes and anti-business rhetoric are not a plan for jobs for growth.
The Coalition's economic plan for jobs and growth does not add to the tax burden on the Australian economy and encourages Australian businesses to expand, hire more people and to purchase more machines, equipment and supplies.
Our plan rewards effort by seeking to reduce the burden of tax on hardworking Australians through lifting the tax threshold for hardworking average full time workers and preventing 500,000 being pushed into the second highest tax level.
Nominal GDP growth rose 0.5 per cent in the quarter to be 2.1 per cent higher through the year, reflecting the fall in terms of trade and low domestic prices.
Labour productivity in the market sector grew 1.0 per cent in the quarter to be 1.8 per cent stronger through the year, which is why the Coalition’s economic plan is promoting conditions for growth in the post mining investment boom.
Only the Coalition can be trusted to manage Australia’s $1.6 trillion economy and only the Coalition has an economic plan for jobs and growth which we will continue to implement from day one of a new term of government if re-elected.