The Australian economy defied expectations in the first three months of this year to contribute to a strong yearly growth rate of 3.1 per cent, but not everyone is getting a cut of the increase.
That rate, known as gross domestic product (GDP), makes all Australians collectively richer than we were at the same time last year.
The one per cent surge so far this year was fuelled by higher mining exports and increased business and government spending, according to Australian Bureau of Statistics (ABS) figures released yesterday.
But there are losers, too, and they include retirees who own their homes. Softening house prices means that the assets of home-owning pensioners may have lost value.
Another dampener on the fortunes of senior Australians relying on the Age Pension is that, along with soft wages growth, their income has virtually flatlined in the past year.
The minuscule rises in government payments each March and September have not been able to offset the rising cost of living in Australia.
This is borne out in yesterday’s ABS figures, which show household consumption firmed just 0.3 per cent this year and that largely reflected spending on essentials.
“With income rises still tracking inflation and house price falls reducing households’ net worth, we expect spending momentum to remain subdued through the rest of this year,” said BIS Oxford Economics macro-economics head Sarah Hunter.
Although Australians’ spending barely budged, their household savings went backwards, falling to a 10-year low of just 2.1 per cent.
The lack of likelihood that house prices or household consumption will increase has economists predicting that the March quarter GDP growth rate could be the last economic bounce for a while.
Did you get the sense that the economy was growing strongly? Do you feel you have been left behind by the boom?