Media Releases

RBA DOWNGRADES ECONOMIC GROWTH

August 09, 2019

It is a damning indictment of the Liberals’ economic management that the Reserve Bank further downgraded their expectations for economic growth in Australia again today.
 
The RBA has reduced its growth forecasts for 2019 from 2¾ per cent to a below-trend 2½ per cent.
 
Scott Morrison and Josh Frydenberg are in denial about the weakness in the domestic economy and that’s why they don’t have a plan to turn things around.
 
The economy under the Liberals is defined by the slowest growth in a decade, stagnant wages, record household debt, high underemployment and declining living standards.
 
These downgrades should be a wake-up call for the Morrison Government.
 
The RBA Governor couldn’t have been any clearer today in his opening statement to the House of Representatives Standing Committee on Economics:
                                                                                                                                          

  • “The downward revision this year mainly reflects weak consumption growth. It has become increasingly clear that the extended period of unusually slow growth in household incomes has been weighing on household spending, as has the adjustment in the housing market.”
  •  “If things evolve in line with this central scenario, it is probable that we will still have spare capacity in the labour market for a while yet, especially taking into account underemployment.”
  • “This means that the upward pressure on wages growth over the next couple of years is likely to be only quite modest, and less than we were earlier expecting.”

The lowest interest rates in our history are not enough on their own to make up for the Liberals’ economic mismanagement.
 
The Reserve Bank can’t do all the heavy lifting on its own.
 
As the Governor emphasised today, monetary policy is not the country's only option. Monetary policy certainly can help, and it is helping, but there are certain downsides from relying too much on monetary policy. One option is for fiscal support, including through spending on infrastructure.”
 
He also noted that productivity growth hadslowed noticeably” and warned that “If this slowing is maintained, it will become a serious issue and as a society we will have to make some difficult adjustments.”
 
The RBA has provided more evidence that the economy is not working for ordinary Australians.
 
The Morrison Government should stop spending all its time playing politics and come up with a genuine plan to restore the economic growth which has deteriorated on its watch.

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