The Aussie economy has passed the zenith of its historic government spending splurge as public investment peaks, according to Westpac.
Today’s data showed that public investment was the primary drag. As the pipeline of public investment projects turns lower, this is feeding through into weaker activity. This quarter new public investment declined 3.4%qtr to be 2.9%yr lower in annual terms. The decline was shared across all levels of government (both defence and non-defence at the Federal level). Public corporations provided an offset, with investment 2.6%qtr higher.
Public consumption rebounded after last quarter’s sluggish outcome. There were gains across defence and non-defence Federal spending as government programs such as the NDIS continue to expand and the final rounds of cost-of-living support flows out the door. At the state and local level, consumption slipped, down 0.3%qtr in Q2.
