Official data on Australia’s economy continue to undermine the Albanese Government’s critics, as Alan Austin reports.
IN A PARALLEL UNIVERSE to the one that hosted Labor’s constructive Economic Reform Roundtable last month, some noisy commentators want voters to believe Australia’s economy is deteriorating and Labor is to blame.
Sky News is running a mendacious campaign asserting the economy is hurtling “off a cliff”. The Australian claims the nation has a ‘new home building crisis’. The Liberal Party is shouting into the void that ‘Labor has regulated the economy into a pulp’.
Fortunately, these dire false narratives are all debunked by the actual outcomes published by Treasury, the Finance Department, the Australian Bureau of Statistics (ABS) and by Australia’s highly profitable corporations.
These show two stark realities — that the economy suffered disastrously through the three Coalition terms and is now rebounding rapidly.
Business gives Labor a huge vote of confidence
Last week’s ABS update on capital expenditure by Australia’s private sector confirmed both observations — that business investment collapsed under the Coalition and is now recovering. (See chart, below.)
(Data source: ABS)
From highs above $210 billion under former PM Julia Gillard after the Global Financial Crisis (GFC), capital investment slumped badly through the Abbott, Turnbull and Morrison years, down to just $144 billion in 2020-21.
What makes this so appalling is that during those post-GFC years, the rest of the world enjoyed strong economic growth, buoyant employment, healthy wage rises, flourishing trade, record capital investment and excellent corporate profits. Government budget surpluses then enabled substantial debt repayment.
Capital expenditure surged in the USA in 2017. It also increased in Spain, the Netherlands and across the Euro Area.
Australia, in contrast, recorded the lowest capital investment in almost a decade in 2017. This declined further in 2020 and 2021, as investment shifted elsewhere.
The second clear message from the chart above is that those dismal days are gone.
Record business start-ups
In the year to June, Australians started 437,150 new businesses and shut down 370,500. That’s a net increase of 66,650, ending the year with an all-time high of 2.73 million firms operating. That’s well above the 2.4 million in June 2021.
Industries with the highest growth in business counts were:
healthcare and social assistance, up 6.6%;
transport postal, and warehousing, up 5.1%; and
financial and insurance services, up 3.7%.
Construction saw a net increase of 10,002 businesses in the last financial year, a lift of 2.2%. This was the result of 76,414 businesses starting and 66,412 closing.
Those numbers appear disturbingly high, but are in fact quite normal. Over the last three years, post-COVID, construction start-ups have averaged 75,300 annually and closures averaged 66,100.
Housing leads the surge
In a surprise to many, and an embarrassment to the doom merchants in the mainstream newsrooms, construction increased substantially in the financial year just ended. That’s according to last week’s ABS report on home building and engineering construction for the June quarter. This makes three straight years of strong growth in this sector following the Coalition slump. (See chart, below.)
(Data source: ABS)
The ABS measures building and construction separately for the private and public sectors. Since the 2022 change of government, all four categories have increased every financial year.
Only once in nine years did the Coalition manage an increase in all four ABS construction categories. That was in 2017-18.
Businesses report record profits
The current profit reporting season is confirming that conditions now enable well-managed businesses to thrive.
Qantas reported a net profit of $1.61 billion in the last financial year, up 28% on what was a healthy return last year. That’s despite the $90 million fine and $120 million it paid in compensation for its unlawful outsourcing of ground handling.
Coles posted a net profit of $1.08 billion, a rise of 2.4%. Wesfarmers Limited reported $2.93 billion in net profit for the year, up 14.4%. Harvey Norman generated a record $518 million profit, up 47% on the year before.
Tabcorp posted a net profit of $36.6 million, in a strong turnaround from its $1.36 billion loss last year. Net profit of Austin Engineering (no relation, unfortunately) jumped 70% to $40.4 million.
Other profit-making corporations include Vodafone, Mecca, Virgin Australia, ASX Limited, Austal and the Macquarie Group.
Newsrooms starting to catch up
The Herald Sun ran a story last week titled ‘Australian household spending tipped to rise on rate and tax cuts’, which was promoted online as ‘Major sign Aussies starting to spend again’.
It reported that, ‘Data released by the Australian Bureau of Statistics shows household spending was up just 0.4 per cent in the March quarter’ and says this is ‘a major sign the worst of the cost-of-living crisis might be over’.
That data is accurate, so kudos to the Murdoch tabloid for getting a story right for a change.
But here’s the thing. The ABS quarterly national accounts data used in that analysis was released on 4 June. So this is not exactly fresh news. The four previous quarterly reports, issued in March, June, September and December 2024, also showed increasing household spending, which all confirmed, as IA reported first back in June 2024 and later in October 2024, that the cost of living crisis actually ended in late 2023.
The Herald Sun should have reported this in early 2024 as it unfolded. It didn’t, of course, because all mainstream newsrooms chose to spruik the false narrative of a cost-of-living crisis through the 2025 election campaign.
Fortunately, this did not succeed.
Now let’s see how long it will take the other loser newsrooms to catch up with reality and report the truth.
Alan Austin is an Independent Australia columnist and freelance journalist. You can follow him on Twitter @alanaustin001.
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