Economy

Updates on the state of the economy, growth, inflation, and employment.

Economy
National dwelling approvals dip 0.3% in Feb: ABS
The total number of dwellings approved in Australia declined by 0.3% to 16,606 in February, following a 6.9% increase in January, according to seasonally adjusted data released by the Australian Bureau of Statistics (ABS). Meanwhile, residential building value rose 5.0% to a fresh record of A$9.65 billion. Brock Hermans, ABS head of construction statistics, noted: "Approvals were varied across the building types. Private dwellings excluding houses fell 1.5%, while private sector house approvals were up 1.0%." Most states saw an increase in total dwelling approvals in February, with Tasmania leading at 61.3%, followed by Victoria at 36.4%, Western Australia up 17.1%, Queensland gaining 13.0%, and South Australia adding 5.4%. New South Wales was the only state to record a decline, dropping 44.1%. Approvals for private sector dwellings excluding houses fell 1.5% after reaching a two-year high in January. However, the segment remains 73.1% higher than a year ago. New South Wales saw just 313 new apartment approvals in February, compared with 2,694 in January, which was the highest monthly figure since May 2023. Victoria, on the other hand, saw an increase in apartment approvals, with 2,294 new units approved in Fe
Economy
Reserve Bank of Australia holds interest rates at 4.1%
Following the Reserve Bank of Australia's first rate cut in five years, policymakers opted to hold rates steady at 4.1% following their two-day policy meeting on Tuesday, largely in line with market expectations. Board members noted that underlying inflation is easing, aligning with forecasts, however, policymakers remain cautious to ensure inflation returns to target sustainably. The board noted that the outlook remains uncertain, with recovering domestic demand and rising household incomes offset by weak business pricing power. Labour market conditions also remain tight, with labour shortages persisting despite easing wage pressures and high unit labour cost growth. The board noted continued concerns regarding the international outlook, as recent tariff announcements from the United States dampen global confidence, with potential spillover effects if trade tensions escalate further. Inflation, however, “could move in either direction”, as many central banks worldwide have eased monetary policy, and are now becoming “increasingly attentive to evolving risks from global policy developments”. Officials are assessing the current policy settings as “restrictive” and reiterated their determination to “sustainably ret
Economy
Trump's tariffs to bring in US$6tn in 10yrs: Navarro
White House aide Peter Navarro said reciprocal tariffs to be announced tomorrow will generate US$6 trillion over the next decade, with another US$1 trillion from automotive levies. Navarro, the Trump administration's senior counselor for trade and manufacturing, says the non-auto tariffs alone are set to bring in ~US$600 billion annually over the next decade, yet it is unclear how the money will actually be generated. The world is waiting with bated breath for the release of Trump's reciprocal tariffs on April 2 - what he calls ‘Liberation Day’ - and the global animosity around the upcoming announcement has caused market volatility across a wide range of sectors.Market bloodbathA sea of red hit global markets on Monday, with the Nasdaq continuing a fall from its worst week in three years. The S&P 500 fell back into correction territory before bouncing off a 6-month low. Tokyo markets were the worst hit, falling 4%. The volatility index, the VIX - a frequent indicator of the market's expectation of volatility - continued its impressive run with a rise of >30% over the last five trading days. Find more: Decoding the 'fear gauge': Volatility and the VIX Meanwhile, Goldman Sachs slashed its S&P 500 forecast for a sec
Economy
Australia's labour productivity still declining: report
Australia’s labour productivity continued to gradually decline last quarter, according to a report by the Productivity Commission. Productivity fell by 0.1% in the December quarter, and by 1.2% across 2024. Both output and the number of hours worked grew, rising by 0.6% and 0.7% last quarter. “The pandemic and the policy response to it drove a sharp rise — and then a crash — in measured productivity. Now that the dust has settled, we're back to the stagnant productivity we saw in the period between 2015 to 2019 leading up to the pandemic,” said Productivity Commission deputy chair Alex Robson. “The real issue is that Australia's labour productivity has not significantly improved in over 10 years. With global policy uncertainty again on the rise, addressing productivity directly via targeted reforms will be the best way to sustainably boost Australians’ living standards.” Output rose by 1.3% in 2024, below 2023’s output of 1.5%. Hours worked increased by 2.5% last year, outpacing 2023’s 1.5% growth. Agriculture, forestry, and fishing saw the largest year-over-year boost in labour productivity last quarter at 4%. Rental, hiring, and real estate, along with ‘other services’, posted the biggest declines at 2.6% and 3.6%
Economy
Dutton's Energy plan waste of taxpayers' money: Forrest
The Coalition’s plan to spend $1 billion building gas pipelines to bring new supplies to NSW and Victoria – which could experience shortfalls by 2028 – has met with instant derision. In an attempt to lower east coast energy bills, Coalition leader Peter Dutton announced plans to divert gas that would have been exported offshore into Australia’s energy grid. | Dutton’s dual pitch to lower energy prices and boost supply includes immediately introducing an “east coast gas reservation” that would secure an additional 10 to 20% of NSW and Victoria’s gas needs. “Gas sold on the domestic market will be decoupled from overseas markets to protect Australia from international price shocks,” Dutton told Parliament in his much-anticipated Budget reply speech. “And this will drive down new wholesale domestic gas prices from over $14 per gigajoule to under $10 per gigajoule. Dutton’s energy pitch also includes a “fit-for-purpose gas trigger to safeguard supply,” “Use it or lose it” rule to ensure offshore gas fields are not banked to reduce competition, and a commitment to audit development-ready projects that boost supply in Australia’s southern states. “This plan will prioritise domestic gas supply, address shortfalls, and re

Economy
Trump: US to impose 25% tariff on foreign-built cars
The United States will impose a tariff of 25% on cars built outside the country, President Donald Trump said today, with major tariffs on a wide range of nations and goods set to begin in early April. Trump said the vehicle tariffs are intended to be permanent, with the goal of urging automakers overseas to add factories in the U.S. “What we’re going to be doing is a 25% tariff for all cars that are not made in the United States,” Trump said. “We start off with a 2.5% base, which is what we’re at, and go to 25%.” “If you build your car in the United States, there will be no tariff,” he said. These tariffs will apply to all completed cars and trucks shipped to the U.S., including American brands with factories overseas. Tariff revenue on vehicles will be collected from 3 April, Trump said. General Motors, Ford, and Stellantis’ share prices all declined by around 5% in extended trading. The European Commission criticised the vehicle tariff plans, with President Ursula von den Leyen saying, “As I have said before, tariffs are taxes — bad for businesses, worse for consumers equally in the U.S. and the European Union.” Automakers are also facing 25% tariffs on steel and aluminium imported into the U.S., which Trump
Economy
Welfare cuts: UK to slash spending, Reeves confirms
Britain's finance minister, Rachel Reeves, confirmed that the Labour government would cut welfare spending by 4.8 billion pounds over the next five years. “The responsible choice is to reduce our levels of debt and borrowing in the years ahead so we can spend more on the priorities of working people,” Reeves said, addressing lawmakers in Parliament. Reeves said the cuts would boost measures to get people back to work and laid out plans to bring forward investment spending, crack down on tax avoidance, and raise revenues for the treasury. The government’s impact statement said that one in 10 people of working age were now claiming sickness or disability benefits. Many have spoken out against the change, including Citizens' Advice chief executive Clare Moriarty. "These looming benefit cuts will drive even more people into poverty, not lift them up," she said. Reeves also said defence spending would increase 2.5% of GDP with reductions in overseas aid, citing that “we are living in an uncertain world”. The Office for Budget Responsibility has predicted that 2025 GDP growth will halve from October 2024’s 2% to 1%. The assessment also said that Reeves would have missed her goal of balancing the nation's books in 20
Economy
Budget 25: Women win health boost, First Nation focus
The latest Federal Budget has attempted to make considerations for women, especially in the ways of healthcare and the gender work gap. A $792.9 million boost into women’s healthcare is one of the centrepieces for women in the Budget. The new investment will target endometriosis, contraception and pelvic pain. “This funding will help Australian women save on contraception, access more endometriosis and pelvic pain clinics, and receive better support through menopause,” Treasurer Jim Chalmers said in his budget speech. “Because for our Government, women’s health is not a boutique issue or a question of special interest – it is a national priority." While this is a positive step forward, some have argued this only focuses on a small number of health issues faced by women. “The biggest killers of women are chronic diseases like heart disease, but risk factors and management of these diseases are really under-studied in women compared to in men,” Professor Amanda Henry, Program Head of Women’s Health at The George Institute and Professor of Obstetrics and Gynaecology in the Faculty of Medicine at UNSW Sydney told Women’s Agenda. In his speech, Chalmers also announced pay raises, including $2.6 billio
Economy
Business writes off Budget as a missed opportunity
The Australian Government’s decision not to extend a so-far unlegislated tax incentive has been widely criticised by business, which dismissed its pre-election Budget as a missed opportunity to revive the economy. Australian Industry Group (AIG) said it was alarmed by the failure to continue the Instant Asset Write-Off (IAWO) scheme, which allows businesses to reduce tax by immediately deducting the cost of eligible assets rather than depreciating them over multiple years. AIG CEO Innes Willox said the abolition of non-compete clauses was deeply concerning and the decision not to extend the apprentice incentive payment program to the manufacturing sector was unfortunate. Describing it as a modest budget that would not “shift the economic dial”, Willox said the proposal to start cutting income tax at the bottom end of the salary bands was welcome. However, it did not represent tax reform or eradicate bracket creep. He said forecasts of a A$42.1 billion (US$26.5 billion) deficit next year and a decade of deficits thereafter would be concerning given no clear path back to balance was outlined in the fiscal document, which was handed down ahead of an election due on 17 May. “Sadly, the budget, while containing some comm