Treasurer Swan defends “outstanding” economy

Treasurer Swan defends “outstanding” economy
Date of Publication: Tuesday, 11 September 2012 09:22

Treasurer Wayne Swan has leapt to the defence of the Australian economy, describing it as ‘simply outstanding’ compared to the rest of the world.


With interest rate cuts failing to inspire the housing market through home loan activity, the government's plan to bring the budget out of deficit has come under scrutiny..


Housing finance data for July showed that the number of successful home loan applications had fallen by 1% compared to June.


Retail sales also continue to fall, which Mr Swan attributed to a mind-set of caution that was gripping consumers. He also said that the rising rate of the Australian dollar was having an impact as Australian exports became more expensive and less competitive.


Commentators are quickly pressing for further interest rate cuts over coming months to support the ailing economy.


"The July figures failed to build on previous positive momentum," said Peter Jones, chief economist of Master Builders Australia.


"If, as suspected, the previous rate cuts have failed to take hold, the Reserve Bank needs to act," he added.


Mr Swan defended the economy, which grew by an annual rate of 3.7%, and the low unemployment rate of 5.1%, which he classed as ‘simply outstanding’.


Nevertheless, he conceded that the economy was facing challenges, and he is likely to be reminded of this often, as the construction industry presses the case for action to be taken to improve the state of the housing market.


Bret Clement

Tuesday, 11 September 2012 09:22
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