The 2025 fourth quarter results confirm Australia’s economy is again among the world’s best, as Alan Austin reports.
THE DISMAL DAYS of Australia’s economic growth languishing at the bottom of the OECD tables are over. The Bureau of Statistics (ABS) last Wednesday reported quarterly growth in gross domestic product (GDP) at 0.8% and the annual growth at 2.6%, both excellent results given global conditions.
The average annual growth for all 38 advanced OECD members for the fourth quarter was 1.86%, with Australia ranked equal tenth in that group. That’s up from 31st near the end of the dismal Morrison period.
This is still well below first place during the Global Financial Crisis when Wayne Swan was Treasurer and, incidentally, current Treasurer Jim Chalmers was his principal adviser. But the economy is well on the way.
National accounts confirm sound policy
Most of last week’s quarterly numbers show the economy is improving in strength and resilience, is steadily becoming more equitable and if not in the global top five already, soon should be.
Australia has enjoyed 17 straight quarters of positive GDP growth, one of only four OECD members to do so. The others are Belgium, Costa Rica and Spain.
The quantum of national income paid to workers last year reached a record $1,393.1 billion, up 6.6% on 2024 and a healthy 23.6% higher than in 2022 BC – Before Chalmers.
The share of total national income going to employees is now 53.9%, up from 49.0% in 2022.
Commensurately, the quantum of national income going to corporate profits was $699.0 billion, down from $723.3 billion in 2022. The share of national income going to profits was 27.1% last year, down from 33.1% in 2022.
Jobs and wages all buoyant
Australia’s workforce expanded by 191,300 to 15,312,600 in 2025. Total job numbers increased by 166,200 to 14,686,000, with the jobless rate at 4.09%. The number of months with the jobless below 4.5% has expanded to a record 50.
Australia’s OECD ranking on unemployment rose from ninth to eighth in 2025, having just snuck ahead of Iceland.
The youth jobless rate declined slightly from 9.06% to 8.98%. Job participation declined from 67.1% to 66.7% as more young workers stayed in school and older workers retired.
Poverty was further eased when the weekly minimum wage was lifted from $915.90 to $948.00.
Average wages grew 3.44%, compared with 3.22% in the previous year. Inflation was 3.76% through the year, slightly above wage rises. But over the last three years, wages have still advanced well ahead of prices.
Household gross disposable income surged to $1,771.6 billion in 2025, up 7.6% from $1,647.1 billion, validating the observations of the 2025 retail spending boom.
Total consumer spending in 2025 was $923.6 billion, with retail spending on goods at $485.8 billion, both all-time highs.
Total retail sales to GDP reached a record 17.7%, confirming the Coalition’s cost-of-living crisis is well behind us.
Real net disposable income per capita increased marginally to $77,510, a 0.17% lift over the previous year.
The rich are still doing nicely
This column has highlighted the Albanese Government’s priority on easing poverty and homelessness here, here, here and here. The latest data bolsters this. New private sector capital outlays on buildings grew 4.0% in 2025 to $190.3 billion. See chart below.
(Data source: ABS)
Poverty alleviation has not been at the expense of the rich unduly, despite the cut in national income going to corporate profits referenced above.
Analysis of all the data from the national accounts and last week’s ABS report on private businesses shows companies are still profitable, albeit in a tougher global environment.
Some corporate profits have been impacted by the severe drop in many commodity prices. Iron ore, for example, was trading above $185 a tonne in late 2023 and early 2024, and traded above $280 in 2021. It languished below $150 for most of 2025.
Hence, profits in the mining sector were lower than in recent years. This does not mean miners lost their jobs and investors went broke. It means that recent super-profits were simply adjusted to more normal levels.
Elsewhere, profits ranged from satisfactory to excellent. Gross operating profits in accommodation and food services jumped 10.3% to $6.78 billion; in wholesale and retail, up 7.5% to $68.9 billion; in transport, post and warehousing, up 9.8% to $36.1 billion; and in arts and recreation services, up 12.5% to $4.83 billion. Not bad.
Gross operating profits in mining fell 7.9%, but still remained a substantial $197.9 billion.
Total gross operating profits in all sectors declined 1.1% to $514.1 billion, while all sectors except mining rose 3.7% to a record $316.2 billion. See chart below.
(Data source: ABS)
Productivity humming along nicely
The official numbers in last week’s accounts show productivity static at 100.1 index points, well below levels in 2020 pre-COVID. We know, however, from wage rises, surging profits, the consumer spending boom and impressive GDP growth that real productivity must be increasing at a substantial rate.
These latest results thus bolster the arguments presented to Jim Chalmers’ productivity roundtable last August that the formula the ABS and others use to measure productivity is obsolete.
The upbeat bottom line
Australia now has the world’s only economy with its jobless rate and inflation both below 4.2%, and median wealth per adult above US$250,000 (AU$355,000).
It is also the only economy with triple-A credit ratings, interest rates below 4% and uninterrupted growth in gross domestic product (GDP) for the last four years.
And did you see the six medals, including three gold, won at the Winter Olympics?
If citizens understood these realities, it could be a great little country.
Alan Austin is an Independent Australia columnist and freelance journalist. You can follow him on Twitter @alanaustin001 and Bluesky @alanaustin.bsky.social.
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