Shorten says he won’t talk down economy

Opposition Leader Bill Shorten is not about to talk down the economy, but says there is no denying that growth is too low.


Asked the day after figures showed the economy growing at its slowest pace in two years whether he thought Australia was heading towards a recession, Mr Shorten told reporters in Perth on Thursday: “I sincerely hope not.”

“I think the Australian people are resilient but the real challenge here, and we can’t deny it, is that our real growth and our nominal growth are too low.”

His comments follow those by Prime Minister Tony Abbott, who conceded that the economy’s not in perfect shape after recording its slowest pace of growth in two years.

The meagre 0.2 per cent rise for the June quarter comes at a time when the federal government is emphasising its renewed focus on “jobs and growth”.

“I’m not saying for a second that things are perfect,” Mr Abbott told 2GB Radio on Thursday.

Finance Minister Mathias Cormann played down the growth result – which took the annual rate down to two per cent and well below the long-term average of pace around three to 3.25 per cent – by blaming it on the largest fall in the nation’s terms of trade in 50 years.

“We are very optimistic about the outlook moving forward,” he told ABC radio, adding the government’s plan for stronger growth and jobs was on track.

Treasurer Joe Hockey said on Wednesday the Australian economy was showing resilience.

But shadow treasurer Chris Bowen scoffed at such statements, saying the government must be living in a parallel universe if it thought everything was okay.

“The treasurer’s actually got to have a dose of reality,” he told ABC radio.

If it wasn’t for additional government spending, growth in the June quarter would have been flat or negative, Mr Bowen added.

But he wasn’t about to predict a recession in Australia, saying “that would be irresponsible of me”.

Respected economist Saul Eslake said while the growth outcome was low, he didn’t believe Australia was on the verge of a recession.