Today’s National Accounts data should set off alarm bells for policy makers with growth dragged down by lacklustre business investment, Business Council chief executive Jennifer Westacott said.
“It’s good news that the economy is still growing but we will need to pick up the pace to repair the budget and secure the economic opportunities Australians need for the future.
“Growth in the last quarter was fuelled by our powerhouse mining and export sectors but domestic demand flatlined, meaning Australia is more vulnerable than ever to global economic headwinds.
“Annual growth of 2.7 per cent won’t deliver the sustained wages growth Australians want, the stronger revenues to government we need or the world class living standards we’ve come to expect. We need a 3 in front of our GDP growth number, because that is what has delivered in the past.
“Business investment equals jobs and opportunities but today’s numbers show investment sliding backwards.
“If we want Australians to get ahead, we need an investment mindset that delivers higher productivity and sustained wages growth but productivity declined last quarter.
“If we don’t act to lift productivity by driving investment, innovation and new industries, the hip pocket gains for Australians will be short lived and they’ll continue to fall behind.
“One practical solution is to introduce a 20 per cent investment allowance for businesses to give them the confidence and certainty to start projects, invest and create the jobs we need across the economy.
“We will need to urgently address the serious structural barriers that risk holding back the private sector including acute worker shortages, getting rid of red tape and making it easier to do new things.
“We must pull every lever to boost our competitiveness and attract new investment by building certainty and making ourselves a more attractive place to do business to secure a future made in Australia.”