Prime Minister Anthony Albanese has barely had time to heat his seat as new information exhibits simply how tough the street forward goes to be.
Scott Morrison and the previous Coalition authorities badly misjudged how robust the economic system was travelling, based on new Treasurer Jim Chalmers, with Labor now dealing with a large job to maintain the nation ticking over.
Inside an hour of being sworn in on Wednesday, Mr Chalmers was already staring down a set of figures exhibiting an economic system battered by conflict, Omicron and historic flooding.
He acknowledged demand had remained robust however nonetheless accused his Coalition predecessors of severely overcooking their pre-election fiscal outlook.
First quarter gross home product (GDP) barely beat expectations on Wednesday by rising 0.8 per cent – a second straight quarterly rise – though this was a drastic slowdown from the three.4 per cent development within the closing three months of final 12 months.
Mr Chalmers stated the final fiscal outlook supplied by the Morrison authorities tipped a lot stronger quarterly development than what eventuated on Wednesday, and likewise overshot expectations for a spread of things together with consumption, dwelling funding, new enterprise funding, exports and nominal GDP.
He didn’t mince his phrases as to the scale of the problem forward, and who was at fault for leaving issues in such a precarious state.
“What we see within the March nationwide accounts is a weaker set of figures than our predecessors and the Treasury anticipated at funds time and on the time of the pre-election replace,” Mr Chalmers stated.
“These nationwide accounts are a glimpse of the mess the previous authorities left behind for us to scrub up.
“You possibly can see in these figures, even the place the quantity on the floor appears comparatively strong, is way decrease in lots of cases.”
A slight beat for the quarterly figures will nonetheless little doubt give Mr Chalmers and the brand new Labor authorities some trigger for optimism however he was adamant Mr Morrison’s authorities overstated expectations.
“There isn’t any level tiptoeing round these severe financial challenges,” he stated.
“There’s no level mincing phrases in regards to the kinds of circumstances that we now have inherited.”
Economists nonetheless largely noticed Wednesday’s outcome as a strong one though annual GDP development at March 31 had slowed from 4.2 per cent to three.3 per cent.
Mr Chalmers additionally acknowledged this, saying demand had certainly remained robust.
Family consumption grew 1.5 per cent, whereas there was a document $7.5bn ramp-up in inventories because the enterprise group replenished its shares.
“Family consumption made a big, constructive contribution to development within the quarter,” famous Sean Langcake from BIS Oxford Economics.
“(Spending) weathered the Omicron disruption fairly effectively, and a falling financial savings fee and catch-up development in discretionary parts will assist development over the remainder of the 12 months.”
Nonetheless, Mr Langcake additionally flagged increased rates of interest and surging inflation will begin to squeeze budgets within the months forward.
There have been numerous different challenges offered in Wednesday’s information.
Internet commerce detracted 1.7 share factors from the quarterly determine, pushed by the strongest rise in imports since December quarter 2009.
This mirrored the arrival of delayed shipments and stock rebuilding by companies nearer to pre-pandemic ranges.
Elsewhere, compensation of workers rose 1.8 per cent for the quarter as expert labour shortages added stress, leading to companies paying extra to draw and retain employees.
This was matched by a 1.9 per cent rise in employed individuals, that means that elevated pay was unfold throughout extra folks.
The ABS additionally reported a 1.7 per cent soar in labour productiveness for the quarter as employees maintained output regardless of employees absences, with an annual achieve of two.8 per cent.
This was simply outstripped by enterprise earnings, which grew by 7.3 per cent on the again of booming commodity costs.
The ABS stated world occasions – together with the rolling battle in Ukraine – would proceed to influence the Australian economic system within the months forward.
The June quarter nationwide accounts are anticipated to indicate additional volatility though development is tipped to enhance barely to three.5 per cent for the 12 months by.
The ASX 200 confirmed little response to the better-than-expected GDP figures and was final 0.2 per cent increased.
The Aussie greenback was additionally largely unchanged, shopping for 71.8 US cents.