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Sustaining strong growth with low inflation needs better productivity outcomes.



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Wayne Swan MP Federal Labor Shadow Treasurer

SUSTAINING STRONG GROWTH WITH LOW INFLATION NEEDS BETTER PRODUCTIVITY OUTCOMES

Buoyed by the strongest global growth in more than three decades the National Accounts released today show that the Australian economy grew strongly over the first three months of this year.

Underpinned by strong household consumption and business investment, the economy grew by 1.6 per cent in the March quarter and by 3.8 per cent over the year.

It’s clear from these figures that Australia is continuing to benefit from the strongest global economy in more than thirty years and the mining boom.

The mining states of Western Australia and Queensland grew at two to three times the rate of the rest of Australia over the past year.

While the mining states have seen the largest direct benefits from the mining boom, it is also clear that the gains are spilling over to other states.

If we are to continue to sustain strong economic growth into the future, without fuelling inflation, we need to lift our productivity performance.

Productivity grew by just 0.9 per cent over the past year - barely half the long-run average rate of productivity growth.

In fact, over the three years to March 2007, labour productivity in the market sector has grown at an average annual rate of just 1 per cent.

While productivity growth is likely to pick up over coming quarters, we must lift our horizons and strive for better productivity outcomes.

Labor has an ambitious economic policy agenda to lift productivity and build prosperity beyond the mining boom.

Investing in the skills and education of our people through an education revolution and taking leadership when it comes to building critical national infrastructure like broadband are critical for future prosperity.

ENDS Wed 6 June 07

Contact :Matt Coghlan 0415098050