In an interview on 3AW, Treasurer Josh Frydenberg flagged the strong data coming out of the IMF and the improving labour figures, although pointed out the need to encourage business and consumer spending.
Mr Frydenberg declared the confidence in the nation, particularly in businesses, is leading to economic recovery that is faster than expected, although faces challenges in view of the vaccine rollout.
The Treasurer said that the budget on 11 May would include the commitment to get people into jobs over fiscal repair, with around 1.35 million Australians still relying on government services including JobSeeker.
The Treasurer noted stats released by the Australian Bureau of Statistics (ABS) which show that Australia’s unemployment rate dropped to 5.6 from 5.8 per cent last month, highlighting the economic recovery was better than markets expected.
Seasonally adjusted employment increased by 71,000 people between February and March 2021, according to ABS data.
Prior to the release of the official figures, Commonwealth Bank CEO Matt Comyn said CBA’s economics team is expecting falls in unemployment to continue, with the unemployment rate reaching 5 per cent by the end of the calendar year and to 4.7 per cent by the end of 2022.
“The recovery in the labour market is, in one word, miraculous,” Mr Comyn said.
Mr Frydenberg explained the Australian economy needed to continue this momentum, with next month’s budget targeted towards jobs and services.
“In this budget, we will have an emphasis on skills, on meeting the workforce shortages, age care is going to be a major feature as well,” Mr Frydenberg said on 3AW radio.
“We are going to focus on the essential services that we can guarantee as well as maintain the wonderful momentum in the jobs market.”
The Treasurer also pointed to data from the IMF, which saw Australia’s economy back to the same position it was a year ago when the March figures were released.
The IMF’s latest economic outlook sees the Australian economy expanding by 4.5 per cent this year, up by 1 per cent on its January predictions following a contraction of 2.4 per cent in 2020.
In upgrading its outlook, the IMF noted that the “Australian economy continues to show a strong recovery momentum” and that a “favourable labour market recovery continues to support a strong rebound in private consumption, added by wealth effects from rising house prices”.