Investment sustaining economic growth

Business investment has grown by 75 per cent in the past four years. This investment is positioning the Australian economy for future growth.

Business investment is expected to be the largest contributor to GDP growth in 2005‑06 and should remain at a high level in 2006‑07.

Investment has been particularly strong in the mining industry, and in related parts of the manufacturing, construction and transport industries.

But investment growth has also been broadly based in other sectors of the economy, including finance, property and business services and wholesale trade.

Increases in corporate profitability and solid economic growth have been important factors in the recent strength of investment. The mining sector has been boosted by the very high prices received for Australia's commodity exports.

Growth in business investment adds to Australia's capital stock, boosting the economy's productive capacity. This will allow the economy to continue to deliver strong growth with low inflation. Strong growth also benefits Australian workers by providing increased employment opportunities.

The Government's commitment to prudent economic management and its ongoing programme of reforms has provided a stable environment and growing economy in which businesses can make profitable investment decisions.