Australia Avoids Recession Thanks to Record Government Spending

Weak private sector performance is offset by public investment, but questions remain over long-term economic sustainability.

Government spending has been the primary driver of Australia's economic growth, preventing a technical recession despite a shrinking private sector.
The Reserve Bank of Australia (RBA) has kept interest rates steady, citing a strong labor market, but its aggressive rate hikes have weakened household consumption and disposable income.
GDP growth for the September quarter was a modest 0.3%, with annual growth at 0.8%, well below historical averages and reflecting a sluggish economy.
Economic debate intensifies ahead of next year's federal election, with the Coalition advocating for reduced public spending and Labor defending its investment in public services and infrastructure.
Critics argue that RBA policies have underestimated the economic strain on households, while government spending has kept nearly 100,000 people employed who might otherwise be jobless.