3% GDP growth delirium misplaced
Treasurer Jim Morrison was doing cartwheels with the solemn news that Australia's 2015 GDP growth rate was unexpectedly high at 3%. The RBA, Treasury and W&D's Uber driver had been laying the money on 2.5%.
W&D hates to rain on Moz' parade, but the fine print tells a different story.
The bounce in growth was because of a boost in consumption spending. We-the-taxpayer went nutzo in the shops. W&D must sheepishly admit to helping the shopping spree - it's amazing the unwanted things that can be bought at Bunnings. Good grief, what was the point of the 145 piece spanner set?
But there is a point to this story. In the December quarter the Australian household savings' rate dropped to 7.6% from 9.1% a year earlier.
This is the lowest household savings' rate since December 2008. Australians are saving less, spending more. Doubtless driven by the seeming comfort of low interest rates.
This is not good news.
The government will bask in the glow of these GDP figures for some time. But W&D sees it as a bit of a sugar hit. And, as any parent will tell you, when the sugar wears off...