In his opening address to the WA Chamber of Commerce and Industry, Prime Minister Scott Morrison said that “without a strong economy, all else is in vain”, adding that the re-elected Coalition government would be starting its new term “getting on with the job of building our economy to secure your future”.
The former Treasurer said that while the Australian economy “has shown remarkable resilience over a long period of time”, with nearly 28 years of economic growth and strong job growth, the country’s economy is facing some “challenges and headwinds”.
Among these “challenges” were global economic impacts, such as “protectionist sentiment and trade conflict” and the nearing of the “peak of the global cycle on interest rates”.
“In the domestic economy, there are challenges too,” he said, particularly noting the effects of “prolonged drought” and floods on regional communities – with farm GDP declining by 6.8 per cent over the past year.
Mr Morrison also noted the recent cooling of house prices in major cities such as Sydney and Melbourne, which he called “a necessary moderation in the housing market”, which has contributed to softer consumer spending.
“Credit tightening, post the banking royal commission, has also dimmed economic activity, especially for small business and housing development,” he said.
“The latest national accounts showed quarterly growth of 0.4 per cent and, while this was a modest increase in growth compared with the previous quarter, it also indicates subdued activity in some parts of the economy – the housing sector, business investment and household consumption.
“It’s fair to say that politics has also played a role, with the election weighing on confidence,” he said.
However, the Prime Minister added that since the federal election, confidence has increased.
“Removing Labor’s threat of massive changes to the housing taxation system has erased some of the gloominess from the sector, which combined with interest rate cuts, prudential changes and our forthcoming First Home Loan Deposit Scheme are providing some support to the market,” he said.
“Our job post-election is now very clear – to get Australians off the economic sidelines and on the field again.”
Mr Morrison went on to say that the Coalition government would therefore look to increase “the levels of investment in our economy” through its previously announced tax changes, incentives to work, investment in infrastructure projects, regulatory and bureaucratic simplification, and skills, capabilities and uptake in new digital technologies to “promote innovation and competition in the financial system”.
Senator Jane Hume, assistant minister to support the Treasurer, will lead the work on digital disruption in the financial services arena, he said.
Mr Morrison concluded: “There are of course many other components to our plan to build our economy into the future that we don’t have time to delve into this morning...
“For now, we will just keep getting on with the job that millions of Australians have entrusted us with to support them to realise their goals and aspirations.”
[Related: PM announces new FHB loan deposit scheme]