Federal Treasurer Scott Morrison is upbeat about the Australian economy despie a report warning we face our slowest income growth in more than half a century
Treasurer Scott Morrison insists the Australian economy remains sound despite ‘worrying’ volatility in global markets.
The Australian share market opened sharply lower, down 1.75%, and the dollar tumbled to a seven-year low on Monday morning amid concerns about plunging oil prices and Chinese stocks.
It comes as a Deloitte Access Economics report warns Australia faces its slowest income growth in more than half a century.
Mr Morrison said it was a ‘worrying time’ on financial markets but the Chinese slowdown was not unanticipated. The government’s plan was ‘exactly as we need it to be’ in the face of volatility in financial markets and a slowdown in the Chinese economy.
Now was the time for ‘sober and wise heads’ and the government wasn’t going to get ‘spooked’.
‘The fundamentals of the Australian domestic economy, I think, are very encouraging,’ the treasurer told 2GB on Monday.
Mr Morrison said Australia wasn’t earning enough as a country and expenditure needed to come down further. He hinted the budget may not return to surplus by 2020/21 as flagged in December’s mid-year budget update, insisting ‘particularly in this global environment, things change a lot’.
Prominent economist Chris Richardson says the treasurer needs to explain to Australians that while the economy is OK, ‘the budget is not’.
Resources Minister Josh Frydenberg said Mr Morrison and Finance Minister Mathias Cormann made it clear in December’s mid-year budget update that lower commodity prices had prompted significant revenue write-downs.
The resources sector would continue to provide billions of dollars to the economy, even if it was less than previously.
‘Australia is a remarkably resilient and diverse economy,’ Mr Frydenberg told ABC radio.
AAP
