THE HON JOSH FRYDENBERG MP
22 February 2019
IMF RECOGNISES AUSTRALIA’S “ROBUST ECONOMIC PERFORMANCE”
The International Monetary Fund (IMF) has recognised Australia’s “above-trend growth” in its annual assessment of the Australian economy and welcomed the steps taken “to further strengthen the financial system” in their Financial System Stability Assessment of Australia.
The IMF finds that Australia’s economic momentum has resulted in improvements in labour market conditions and with the economy moving towards full employment the IMF notes that wages growth has picked up.
The Coalition Government’s plan is delivering strong economic and jobs growth. We have just completed our 27th year of economic growth and more than 1.2 million additional people are in work than when we came to office five years ago. Over the last financial year, almost 350,000 jobs were created – the largest number in any financial year since 2004-05.
The IMF endorses the Government’s fiscal strategy of returning the budget to surplus – Australia’s first in over a decade – while commending “Australia’s infrastructure investment boost as a critical source of demand in the near term” which “should help raise productivity and support longer-term growth”.
The IMF notes the cooling of the housing market, stating “the correction in the housing market has been orderly, in the context of a strong economy”. Importantly, it notes, the correction is “enhancing opportunities for first-time home buyers and purchases by owner-occupiers more broadly”. This is being borne out in the data, with the number of loans for first home buyers over 2018 reaching a nine-year high.
In its Financial System Stability Assessment, the IMF welcomes “steps to further strengthen the financial system since the previous assessment” which occurred six years ago. In particular, the IMF notes “policy action has lowered financial stability risks” and that “Australia benefits from a robust regulatory framework”.
In response to the Final Report to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, the Government is taking action on all 76 recommendations and, in a number of important areas, going further. Our principal focus is on restoring trust in our financial system and delivering better consumer outcomes, while maintaining the flow of credit and continuing to promote competition.
With the IMF warning of risks to the economic outlook, noting that “near term risks to growth are to the downside, mirroring the global risk picture”, Australia cannot risk a return to Labor’s high tax and spend approach.