The Australian economy has grown strongly since March 1996, averaging 3.5 per cent annual growth. This is despite the economy being buffeted by a turbulent world economy and drought.
High level of business investment
Business investment has grown at an average annual rate of 8.4 per cent since March 1996. Business investment is at its highest level as a share of GDP in 32 years and has grown by more than 70 per cent in real terms over the past four years. This is paving the way for future growth in the economy.
Equally impressive has been the strength of the labour market, with the unemployment rate falling to 4.5 per cent in the March quarter 2007. Over 2 million jobs have been created since March 1996.
Over the period of uninterrupted expansion, annual inflation has averaged around 2½ per cent, right in the middle of the medium term inflation target band. This has allowed interest rates to remain low by historical standards.
Income and wealth
Australians are benefiting from the strong economy through increased income and wealth.
Strong income growth reflects strong employment and real wage growth. Since March 1996, real wages have increased by around 20 per cent. Profits have also grown strongly, particularly in the resources sector.
Total real household wealth has more than doubled over the past decade, reflecting strong growth in both dwelling and non dwelling wealth.
2 2007‑08 Budget Overview