While Prime Minister Tony Abbott has warned his parliamentary collegaues about the outlook, new data points to a growing economic momentum.
Prime Minister Tony Abbott has warned his coalition colleagues there could be further economic shocks to come.
But speaking in the wake of Toyota’s decision to end car-making in Australia in 2017, he said it was not for government to chase companies up the street with a blank cheque.
It was the job of government to put in place the “muscles and sinews of a strong economy”.
Treasurer Joe Hockey told the first parliamentary question time of the year on Tuesday it was “hugely important” for the Australian economy that the government has control of its budget.
Despite these words of warning new data showed business kicking off 2014 in buoyant fashion with trading conditions at their highest level in almost three years, supported by low interest rates and a depreciating Australian dollar.
Other reports also showed the value of home loans at record highs, while house prices across the nation were on average growing at their fastest annual pace in more than three years.
The latest National Australian Bank survey showed business conditions rose again in January to their highest level since March 2011.
“Conditions look to have turned around a little faster than we had expected just a few months ago, with low interest rates and the depreciating Australian dollar gaining surprisingly good traction in some non-mining sectors of the economy,” the bank said.
Business confidence also rose for the first time in four months.
At the same time, the value of home loans granted in December totalled a record $27.1 billion, up 0.2 per cent from the previous month.
While the number of home loans in the month at 51,692 was 1.9 per cent lower than the previous month, it was only the second monthly decline since February last year.
At the same time, the Australian Bureau of Statistics said residential property prices in the nation’s eight capitals grew 3.4 per cent in the December quarter, to be 9.3 per cent higher than a year earlier.
Sydney prices led the way, rising 13.8 per cent over the year.
Commonwealth Securities economist Savanth Sebastian said the data was yet more evidence that the housing market is taking over as the economic driver of the economy.
There was also good news for West Australian growers, who are forecast to see a 55 per cent increase in their winter crop in 2013/14 to 17.2 million tonnes.
Agriculture Minister Barnaby Joyce said the surge in crop production is coinciding with an ebb in the mining boom.
“Suddenly we’re reminded that agriculture is a traditional pillar of the Australian economy,” Mr Joyce said in a statement.