Australia’s economy is “in a better position than most”, according to federal Treasurer Jim Chalmers, despite the nation still facing several challenges including sticky inflation.
Speaking at the Australian Securities & Investments Commission’s (ASIC) Annual Forum 2023 yesterday (21 November), Mr Chalmers stated that – despite several obstacles – the nation’s economy remained resilient.
He stated: “Among all of the countries that we compare ourselves with, we are in a better position than most if not all of those countries.
“Obviously, growth is slowing in our economy. Confidence at a consumer level is relatively low, but we have a very resilient labour market.
“Business investment has been quite remarkably strong and we have other advantages as well, particularly when it comes to what we sell the world, the prices that we are getting, and a range of other benefits as well.”
Mr Chalmers added that while inflation is moderating in the economy, down from the peaks of last year, the government wants to see it fall further and faster and was confident in its “direction of travel”.
The resiliency of the labour market was also a key focus looking ahead, with the Treasurer calling it a “pretty remarkable feature” of the economy, particularly as “we’ve still got unemployment with a three in front of it”.
“The monthly unemployment figures that we use now began in 1978 and in the 45 years since then, there have only been 20 months where the unemployment rates have a three in front of it and 17 of those 20 have been in the last 17 months,” Mr Chalmers indicated.
“That gives you the sense of the really quite remarkable symptoms in the labour market, something like 620,000 jobs created over the first 17 months of our government. So that gives you a bit of a sense of the strength in the labour market.”
However, he also acknowledged that the labour market was “softening in ways that we would anticipate given the conditions” when looking at indicators such as job ads and hours worked.
Mr Chalmers stated that there were “five big shifts” occurring in the economy, with the government looking to take advantage of them all.
The five changes he highlighted were globalisation to fragmentation, hydrocarbons to renewables, information technology to artificial intelligence, younger to older populations, and the move from the industrial base towards care.
He commented: “I think our job is to make sure we are the biggest beneficiaries of those shifts that are underway in the economy, in ways that create the most opportunities for the most people in most parts of the country.”
The Treasurer also indicated the importance of the government’s focus to “renew and refocus” institutions such as the Reserve Bank of Australia (RBA) and the Productivity Commission (PC).
He commented: “We are going about strengthening the Reserve Bank, working closely with Michele [Bullock], the way we are renewing and resurfacing the PC working closely with Danielle [Wood].
“These are really, really important priorities for us and they fit into a broader piece, which is how we make that if we want our economic policy and our economic decisions to be as good as possible, then we need to make sure that the institutional base for that is as robust and as focused as it can be.”
