Yesterday’s national accounts delivered a very encouraging and positive set of numbers.
Real gross domestic product growth is up 3.4 per cent through the year, beating market expectations, and it is stronger than the growth rate of any G7 country. Australia now enjoys not only its 27th year of consecutive economic growth but the highest growth rate since 2012, during the once-in-a-generation mining boom.
Significantly, the nominal rate of GDP growth for the year is also up at 4.7 per cent, surpassing the budget forecast of 4.25 per cent. This will flow through to the final budget outcome due this month.
What is so pleasing about the breakdown of yesterday’s numbers is that GDP growth is broadly based. No single sector did all the heavy lifting. Household consumption, dwelling investment, business investment — both mining and non-mining — final public demand, a euphemism for government spending, and exports were all up for the year.
Business conditions and confidence were above the 20-year historical average, and the unwinding of the mining and investment boom, which for the past few years has been a drag on economic growth, now has almost worked itself out of the system.
Jobs are being created at a rapid rate with the impact being felt right across the economy.
In the last financial year, 330,000 jobs were created, the largest jobs growth we have seen since 2004-05.
With the unemployment rate at 5.3 per cent, the lowest since 2012, and participation rates (65 per cent) about record levels, more women, seniors and young people are finding employment.
Indeed in 2017-18 more than 95,000 Australians aged 15 to 24 found employment. This was the best result since 1988-89, almost 30 years ago.
Although it is true wage growth has been low, compensation of employees continues to grow at 4.8 per cent through the year, reflecting the strong employment growth, and the outlook for the labour market is strong.
The Reserve Bank is forecasting the unemployment rate will continue to decline.
Indeed, in a statement on Monday announcing the cash rate was to be kept for the 25th consecutive month at 1.5 per cent, the Reserve Bank made reference to tightening labour market conditions, referring to skills shortages in some areas, while indicating that with the economy continuing to grow there should be a “further lift in wages growth over time”.
The growth in the Australian economy is a very powerful story and is allowing the government to fund the essential services we need — with more funding for hospitals, schools, childcare, infrastructure and the National Disability Insurance Scheme.
Programs such as these without a strong economy amount to little more than empty promises that cannot be kept.
This is why so much is at stake at the next election.
In government during the past five years the Coalition has demonstrated sound economic management, which has involved the lowest growth in government spending in 50 years, the proportion of working-age Australians dependent on welfare falling to the lowest level in 25 years, and a budget that is on track to return to balance next year, the first time in more than a decade.
A lower, simpler, fairer tax system also has been legislated, with significant company and personal income tax cuts — with our enterprise tax plan benefiting more than three million businesses that have a turnover of less than $50 million and employ about seven million Australians.
The government’s personal income tax cuts also have led to more than 10 million Australians being better off by up to $530 a year from step one of our plan, which took effect on July 1.
By the time the personal tax cuts are fully implemented, 94 per cent of taxpayers will pay no more than 32.5c in the dollar.
In contrast, Bill Shorten will go to the next election promising to roll back tax relief for about seven million workers and deny income tax relief to millions of Australians.
This is all part of a Labor strategy to shrink rather than grow the economic pie and slug Australians with more than $200 billion in new taxes — hitting their income, their business, their property and their retirement savings.
When people go to the ballot box at the next election, the choice will be clear: the Opposition Leader will be taking money out of their pocket and Scott Morrison will be leaving it in.
Josh Frydenberg is the federal treasurer.