Minister rebuffs opposition GDP commentary

Finance Minister Katy Gallagher has rebuffed attacks on the government after fresh figures showed sluggish growth in Australia’s economy, recording the slowest rate since the 1990s.

Senator Gallagher said the “clear challenges in the economy” laid out in the GDP data justified the government’s budgetary measures, pointing to “cost-of-living relief” and “reshaping” Coalition-era tax cuts.

The Australian Bureau of Statistics on Wednesday released GDP data that showed the economy grew by 0.2 per cent in the June quarter, and 1 per cent over the last year.

“Government investment, public investment, is helping to support the economy which is … appropriate when we’re going through such difficult times,” she told the ABC on Thursday.

“We made some decisions about cost-of-living support. We knew this quarter would be difficult and the government has a role to play.

“We have a lot of things going for us as well … inflation has halved, we got some of the cost-of-living relief rolling out, we created a million jobs as well and those are really important things.”

While Wednesday’s GDP figures showed the economy grew for an 11th consecutive quarter, albeit meagrely, the opposition has homed in on GDP per capita, which has been in decline for six consecutive quarters.

“I don’t take economic advice from the opposition,” Senator Gallagher said.

“Obviously, they’re there to make a political point.”

She said the government’s focus “is really on making the right decisions for the right time.”

Shadow treasurer Angus Taylor said households were measuring the government’s performance by what they could “feel”.

“What households or Australians feel in the economy isn’t the aggregate outcome, it’s the outcome per person, per household,” he told the ABC on Thursday.

“It’s gone backwards now for six quarters in a row, 18 months, and the result of it is that Australians’ standard of living has fallen by nine per cent since Labor came to power.”

He said that chucking public spending into the mix “adds to inflation”, which in turn pushes up costs.

In recent months, the Coalition has seized on public spending, which propped up much of the June quarter growth, stoking rumours of a rift between the Treasury and the Reserve Bank.

The relationship has been characterised as the government putting its foot on the accelerator, and the RBA pushing on the brake.

Treasurer Jim Chalmers himself contributed to the rumours when said interest rates were “smashing the economy” in colourful remarks on Sunday.

He later clarified that while the Reserve Bank and the government had different roles, they were working together to combat inflation.