Strong growth
Australia's economic expansion is set to continue into its seventeenth year. In 2007-08, the economy is expected to grow by 3¾ per cent.
Drought
The forecast for 2007-08 assumes a return to average seasonal conditions and a partial recovery from the drought, which is expected to add ½ of a percentage point to GDP growth.
Terms of trade
The terms of trade have moved strongly in favour of Australia since 2001. Unlike earlier improvements in the terms of trade, this has not led to high inflation and unsustainable wage growth, reflecting the flexibility and resilience of the Australian economy as a result of continuing reform.
Accelerating exports
Since the start of 2000, more than $70 billion has been invested by the mining industry to enhance its productive capacity. This is expected to translate into accelerating mining exports in 2007‑08 and beyond.
Increasing productivity
Productivity is expected to increase in 2007-08. Strong business investment is boosting the economy's productive capacity and laying the foundations for sustainable economic growth in the years ahead.
Increasing participation
The participation rate was at a near record high of 64.8 per cent in the March quarter 2007 and is expected to remain high. Increased labour force participation is a reflection of the strong economy and policy reforms such as Welfare to Work and tax cuts.
Strong and broadly based economic growth to continue
3 2007‑08 Budget Overview