Page 3489 - Week 08 - Thursday, 18 August 2011
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We experienced the equal lowest consumer price inflation of the capital cities in 2010-11, at 2.7 per cent. The ACT labour market performs well compared with other jurisdictions. We have the lowest unemployment rate in Australia—it was four per cent in July 2011, well below the national average—and we have the highest participation rate of 72.5 per cent.
Our housing market also continues to perform well. Current housing indicators point to stabilising growth, after the peaks which occurred following the commonwealth government’s stimulus measures. The trend of housing finance commitments for owner occupiers in the ACT remains above its five-year average in June 2011. The value of housing finance commitments for individual investors for new and existing dwellings increased again in June 2011 for the third consecutive month, and it, too, remains above its five-year monthly average.
The government’s policies and programs are working to keep our economy strong. Year on year to the March quarter 2011, dwelling investment increased by 26.1 per cent, and dwelling investment was the second largest contributor to state final demand growth. Data shows residential investment remains strong, with residential building approvals in the ACT increasing to a record level in June 2011. This was the ninth consecutive monthly increase, and, again, approvals remain significantly above their five-year monthly average.
The number of residential building approvals rose by 28.7per cent year on year to June 2011. Nationally it decreased by 5.1 per cent. Through a range of initiatives in the 2011-12 budget, the government continues to release more residential land. Over the next four years, the land release program aims to deliver 18,500 residential dwelling sites.
Strong population growth in the territory is also supporting our economy. The ACT’s residential population increased by two per cent in the year ending 31 December 2010. This is the highest annual growth in two decades. Compared to other jurisdictions, it was the second strongest population growth after the mining state of Western Australia.
As members would be aware, the degree of uncertainty surrounding the global economic situation has increased in recent times. Global financial markets are experiencing extraordinary financial instability flowing from a deepening of Europe’s sovereign debt crisis and the United States’ growth and sovereign debt woes. The volatility in the currency, equity and interest rate markets has indeed been severe. International equities have fallen substantially since the beginning of July, and market volatility has affected Australian equities and interest rates.
So we must be clear: the volatility in markets experienced in recent days is not solely the function of the recent downgrade of the US credit rating. Global share markets have in fact been deteriorating since July. This is due to the Euro sovereign debt concerns, caused by the risk of default by Greece and challenges for both Portugal and Ireland. More recently, possible defaults on Italian and Spanish debt—and the continuing poor economic conditions in the United States—have further increased uncertainty.
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