“But it’s important to stress that growth was still confined only to household and government spending. We are concerned that major sections of the economy like business investment, residential building and civil construction continue to slump,” he said.
Mr Garrett said the December figures also don’t fully reflect the negative impacts of the bushfires and pre-date the impact the coronavirus.
“Given these challenges it is imperative that everything is done to boost demand and confidence across our economy including support for building and construction businesses affected by disruption to building product supply chains and the broader economic impact of the coronavirus,” he said.
Mr Garrett said these figures also reflect the fact that during the December 2019 quarter, the volume of inventories held by firms rose while imports to Australia shrank.
“Even though these are the result of weak demand, the mechanics of GDP accounting means that these two issues ended up inflating the headline result for economic growth.
“Master Builders Australia’s pre-Budget submission calls for a range of interventions to stimulate business investment incentives. These include extending the $30,000 instant asset write off and also enhancing the tax treatment for larger investments,” Mr Garrett said.
