Aussie growth craters with government spending

Advertisement

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.

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:
Cancel at any time through our billing provider, Stripe
About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.