The Australian dollar has fallen below 84 US cents for the first time since 2010 following a shock slowdown in economic growth.
The local currency hit 83.97 US cents, its lowest level since July 2010, after the figures were released at 1130 AEDT on Wednesday, down from 84.62 cents just before.
Australia’s economy grew by 0.3 per cent in the September quarter and by 2.7 per cent in the 12 months to September, official figures show.
The latest growth figures are only marginally lower than expected, says Treasurer Joe Hockey.
“While the September figures are weaker than market expectation, 0.3 per cent is only marginally lower than what we were expecting,” Mr Hockey said.
He said the figure for the last year of the Labor government was 1.9 per cent.
Mr Hockey said while export volumes in the resources industry had been strong and production had picked up strongly, prices for iron ore and thermal coal had fallen dramatically in recent times.
This reflected “quite starkly” that the resources sector was switching from significant investment to significant production, he said.
Mr Hockey reiterated the government’s determination to push ahead with its economic reform agenda.
“These national accounts confirm that when it comes to the future of Australian economy, complacency is our enemy,” he said.
“Doing nothing on economic reform is not an option for our country.”
Disposable income has dropped for two quarters in a row.
Asked whether parts of the economy now appeared to be in recession, Mr Hockey said: “No.”
“Fundamentally we are endeavouring to stabilise the rise in unemployment,” he said.
“Importantly, we are seeing strong export growth.”
Mr Hockey said he was taking advice from Treasury on the benefits of the three free trade agreements signed with China, Japan and Korea.
“I have no doubt 2015 will be better and beyond will be better than that,” he said.
The downturn in mining-related construction highlighted the importance of the government’s infrastructure plans, Mr Hockey said.
Directly addressing new Victorian Premier Daniel Andrews, he said now was not the time to cancel the East-West link.
“We need to get on with infrastructure activity fast, and we need harness all the private investment of the corporate sector,” he said.
However, Mr Hockey signalled the government might be willing to compromise in its battle over the road project.
“If they’ve got some other project that can immediately take 250 workers that are currently working on East West then we are happy to talk,” he said.
The treasurer promised 2015 would be a year of reform, pointing to a host of financial inquiries and economic white papers soon to be released by the government.
He also repeated his call for shoppers to spend big over Christmas.
“Not just for Santa Claus but for Australia,” he said.