A strong economy

A standout performer among advanced economies

The Australian economy is in a much stronger position relative to many other advanced economies, due in part to the Government's decisive policy response to the global financial crisis (GFC).

Australia was one of the only advanced economies to avoid a recession during the GFC, and has since grown at a solid pace — having recently entered its twentieth year of consecutive economic growth.

Australia's GDP is significantly higher than its pre‑GFC level, while many other advanced economies are struggling to make up lost ground.

Ready to confront future challenges

The Australian economy's fundamentals remain strong, allowing the economy to confront the temporary effects of the recent natural disasters, and future challenges, from a position of genuine strength.

A strengthening economy has supported strong employment growth. Over the past year alone, more than 300,000 jobs have been created and the unemployment rate has fallen to around 5 per cent.

At the same time, underlying inflation has moderated to around decade lows.

Our terms of trade are at their highest sustained levels in 140 years, driving an unprecedented mining investment boom.

Increased export capacity is supporting significant growth in national incomes.

However, the investment boom will give rise to some inevitable capacity pressures.

In these conditions, it is important that the Government does not compound these pressures, which is why the Government is rapidly returning the budget to surplus in 2012‑13 as planned.