SYDNEY (Reuters) -Australia’s Labor government, elected for a second term last month, is focused on improving productivity, addressing the budget deficit and building a resilient economy as global volatility spikes, Treasurer Jim Chalmers will say on Wednesday.
In a speech at the National Press Club, Chalmers will say that tackling sagging productivity is the government’s primary focus, after voters delivered Labor a landslide victory last month.
“Our budget is stronger, but not yet sustainable enough. Our economy is growing, but not productive enough. It’s resilient, but not resilient enough – in the face of all this global economic volatility,” according to excerpts of the speech seen by Reuters.
“The best defence against global volatility and the best way to lift living standards is with a more productive economy, a stronger budget, and more resilience.”
Australia’s economy barely grew in the first quarter as consumers kept a tight hold on their wallets and government spending, the engine of activity last year, sputtered to a standstill. U.S. tariffs have since darkened the outlook for small and open economies like Australia’s.
The ongoing battle between Israel and Iran has also raised the risk of a wider conflict in the Middle East, which has sent oil prices sharply higher.
The Reserve Bank of Australia has already cut interest rates twice since February and investors are betting on three more cuts by the end of the year to take rates from 3.85% to 3.1%.
However, there are signs that foreign investors have been turning to Australia’s domestically focused stocks, choosing an often overlooked market as a trade war hideout.
(Reporting by Stella Qiu; Editing by Kate Mayberry)
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