Australia’s economy continued to grow in the March quarter with the Australian Bureau of Statistics reporting a 0.4% rise in GDP.
Australian Chamber of Commerce and Industry acting chief executive Greg Evans said the National Accounts figures were good news and placed the nation ahead of comparable economies across the world. He warned however it was no time for complacency and Australia needed to ensure it did not drift into a real recession.
ACCI said stimulatory measures to date including monetary policy and fiscal measures had bolstered consumer spending and helped build confidence in the housing sector.
“Despite the better GDP headline, business is still dealing with extremely difficult trading conditions and unemployment is expected to continue to increase,” Mr Evans said.
“ACCI’s business surveys indicate that sales, profitability, investment and employment measures are at or near historic lows.”
Weakness in business investment was evident over the March quarter, with a plunge of 6.1%, mainly due to a decrease in machinery and equipment investment.
“Business investment remains an important driver of growth and employment opportunities and measures including the Government’s investment allowance are critical,” Mr Evans said.
“In this regard we consider the 30% tax break for larger business should be extended until the end of 2009.
“It is clear that private sector involvement will be necessary to build a sustainable economic recovery and this will include promoting business confidence and reducing the regulatory burden and compliance costs for business.”
Treasurer Wayne Swan said the National Accounts confirmed that the Government's economic stimulus was working well, and was helping to position Australia among the best performers in the developed world.
“The Australian economy is not out of the woods yet, and the full impacts of this global recession still have some way to run,” he said.
“But the Government's economic stimulus strategy is clearly helping to cushion Australia from the worst impacts of the global recession and ensure we are well placed to seize the opportunities presented by the global recovery when it arrives.”
In response to the figures, Federal Opposition Leader Malcolm Turnbull said jobs needed to be a priority for the Australian economy to keep its strength.
“It’s a reminder of the importance of ensuring that our focus is always on the real consequences of these economic developments – jobs,” he said.
“The fact of the matter is that our domestic economy is still slowing – the Reserve Bank said that only the other day – and that has consequences for jobs. We have to be focused on policies that will promote jobs.”