Joe Hockey has warned Australians’ living standards will fall if key budgetary savings measures aren’t passed in parliament.
The warning comes after the latest national accounts showed the economy grew by just 0.3 per cent in the September quarter.
This figure is less than half of the 0.7 per cent growth most economists predicted.
Several savings measures have been opposed in the senate, including the $7 GP co-payment and university fee deregulation, leaving billion-dollar holes in the budget.
While the Reserve Bank of Australia held the cash rate at 2.5 per cent on Tuesday, the Australian dollar dived to a four-year low of US83.90.
Echoing Mr Hockey’s warning, BHP Billiton director Malcolm Broomhead last month predicted living standards would fall due to Australia’s flagging economy.
“The cost of meals, of motor cars, of housing, of even the basic necessities of life, are all far higher in Australia than almost anywhere else in the world,” Mr Broomhead said at the company’s general meeting.
“But suddenly our resource commodity prices have dropped, many of our manufacturing plants are shutting down, and our national income can no longer support our high wages, which in turn pay for these high living costs.”
Mr Hockey blamed Labor and the Palmer United Party for blocking reform.
“The hand-brake on reform, whether it be the Palmer United Party or the other independents, is caused by the fact the Labor party is opposed to it,” Mr Hockey told the Australian Financial Review.
“If they don’t embrace change, they will be responsible for lower growth in living standards.”
Labor’s finance spokesman Tony Burke blamed the government’s unpopular budget and mixed messages on the economy for a downturn in consumer confidence and growth.
“When the government can’t explain what they think is happening with the economy, then you get a hit to confidence and you get a whole series of challenges starting to unfold,” he told Sky News on Thursday.
– with AAP