Sustained economic growth — the key to our prosperity
Good growth prospects
Australia’s economic performance has been outstanding since the recession of the early 1990s, with moderate inflation. We now have historically low unemployment.
Prospects remain good, with economic growth forecast to be 3 per cent in 2005-06.
Business investment is expected to remain strong, increasing the productive capacity of the economy. Housing investment and consumer spending are expected to ease to more moderate growth rates.
World economic activity is also supporting the Australian economy. Currently, export prices are at record highs, supporting Australian incomes. Exports are set to expand in 2005-06. Mining exports, in particular, will grow strongly, as recent investment to increase production and transport capacity comes on stream.
Inflation is expected to remain moderate, with the unemployment rate staying around its current 28-year low.
The Government expects to deliver its eighth budget surplus in 2005-06, with substantial surpluses projected for the next three years.
By maintaining budget surpluses, the Government is doing its part to reduce pressure on the current account and interest rates.
Australia’s strong position contrasts with the fact that most OECD countries are expected to record budget deficits in 2005-06.
The Government’s sound economic management continues to promote sustained economic growth, ongoing increases in household incomes, modest inflation and low unemployment. This will continue to improve Australians’ wellbeing, now and into the future.
4 2005-06 Budget Overview