Treasurer Joe Hockey: The economy is behaving just as we forecast in May’s budget

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Photo: Lisa Maree Williams / Getty Images.

Federal treasurer Joe Hockey says the GDP figure released today is strong despite the impact of lower commodity prices and that Australia’s economy “growing well”, despite the June quarter growth of 0.2% growth being well under market expectations.

“The GDP is just as we forecast in May. We have outperformed our other budget forecasts,” he said. “It’s the fastest growth in household incomes since September 2013,” adding that housing was 7.4% higher.

“Today’s numbers again highlight the huge potential of our services sector.”

He said there is more construction to come in the months ahead and that reducing taxes and cutting red tape is now producing a dividend.

“The May budget is already adding momentum to the economy, our economic plan overall is working”.

Hockey said 10 days of bad weather in April, which closed the coal port of Newcastle, was to blame for poor export figures in the quarter, adding that the country was relatively “well positioned” for any weakness in China.

“Quite clearly there is a resilience in the Australian economy,” he said, adding that it was at a level “the people in Canada and elsewhere would die for”.

Taking a swipe at Labor, the treasurer said free trade agreements were critical to the nation’s future prosperity.

“Key to our plan and growth target is free trade agreements with Japan, Korea and China. If you want faster economic growth, then you won’t get it blocking the FTA with China.”

Hockey rejected reports that Q2 posted the worst nominal growth in more than 50 years, he said “It’s wrong to say it’s the weakest growth since 1961, factually wrong”.