The Australian Bureau of Statistics launched the most recent – Australian Nationwide Accounts: Nationwide Earnings, Expenditure and Product, March 2025 – as we speak (September 3, 2025), which exhibits that the Australian financial system grew by 0.6 per cent within the June-quarter 2025 (up from 0.2 per cent) and by 1.8 per cent (up from 1.3) over the 12 months. GDP per capita progress turned constructive after a number of consecutive unfavorable quarters. Family consumption expenditure progress strengthened and led the sturdy progress in home demand. Total, a surprisingly strong consequence.
The primary options of the Nationwide Accounts launch for the June-quarter 2025 had been (seasonally adjusted):
- Actual GDP elevated by 0.6 per cent for the quarter (0.2 per cent final quarter). The annual progress fee was 1.8 per cent (1.3 final quarter).
- GDP per capita rose 0.2 per cent (-0.2 per cent final quarter) and 0.2 per cent for the yr – an enchancment.
- Australia’s Phrases of Commerce fell 1.1 per cent for the quarter and -2.4 per cent over the 12 month interval.
- Actual web nationwide disposable earnings, which is a broader measure of change in nationwide financial well-being, rose by 0.5 per cent for the quarter (0.6 final quarter) and a couple of.1 per cent over the 12 months – an enchancment.
- The Family saving ratio (from disposable earnings) fell to 4.2 per cent from 5.2 per cent.
Total progress image – progress fee a lot stronger than in latest previous
The ABS – Media Launch – mentioned that:
Australian gross home product (GDP) rose 0.6 per cent within the June quarter 2025 … and 1.8 per cent in comparison with a yr in the past …
Financial progress rebounded within the June quarter following subdued progress within the March quarter, which was closely impacted by climate occasions …
Home closing demand was the principle driver of progress led by family and authorities spending. Public funding was the biggest detractor from progress.
Web commerce additionally contributed to GDP progress, led by exports of mining commodities.
GDP per capita elevated 0.2 per cent this quarter, following a lower within the March quarter …
Public funding fell 3.9 per cent and was the biggest detractor from progress. Excluding the Covid interval, this was the biggest fall since September 2017 …
Authorities closing consumption expenditure rose 1.0 per cent within the June quarter …
The family saving to earnings ratio fell to 4.2 per cent within the June quarter from 5.2 per cent within the March quarter.
The brief story:
1. The weak point in personal home demand that has been a characteristic of the previous couple of years reversed within the June-quarter, with the persevering with return to stronger family consumption expenditure – up 0.9 per cent.
2. The big State authorities infrastructure initiatives in transport and well being are unwinding, which largely explains the decline in public sector funding expenditure.
3. Authorities consumption expenditure rose, partially, due to the expenditure related to the Could federal election.
4. The family saving ratio fell as a result of the expansion in nominal family spending (1.5 per cent) outstripped the expansion in disposable earnings (0.6 per cent).
The subsequent graph exhibits the quarterly progress during the last 5 years with the intense observations in the course of the worst a part of the COVID restrictions and authorities earnings help taken out.
To place this into historic context, the following graph exhibits the last decade common annual actual GDP progress fee for the reason that Sixties (the horizontal pink line is the common for the whole interval (3.28 per cent) from the June-quarter 1960 to the June-quarter 2025).
The 2020-to-now common has been dominated by the pandemic.
However because the earlier graph exhibits, the interval after the foremost well being restrictions had been lifted generated decrease progress in comparison with the interval when the restrictions had been in place.
If we take the observations between the December-quarter 2020 and the December-quarter 2022 out, then the common since 2020 has been 1.8 per cent each year.
It’s also apparent how far under historic traits the expansion efficiency of the final 2 a long time have been because the fiscal surplus obsession has intensified on either side of politics.
Even with an enormous family credit score binge and a once-in-a-hundred-years mining increase that was pushed by stratospheric actions in our phrases of commerce, our actual GDP progress has declined considerably under the long-term efficiency.
The Sixties was the final decade the place authorities maintained true full employment.
GDP per capita improves
Within the June-quarter 2025, GDP per capita grew by 0.2 per cent and placing an finish to the hypothesis of a renewed GDP per capita recession.
Whereas commentators concentrate on this statistics, the that means of the common is questionable, given the extremely skewed earnings distribution in the direction of the highest finish.
What we are able to say is that if the common is declining, then these on the backside are doing it very powerful certainly.
The next graph of actual GDP per capita (which omits the pandemic restriction quarters between December-quarter 2020 and December-quarter 2021) tells the story.
Evaluation of Expenditure Parts
The next graph exhibits the quarterly share progress for the foremost expenditure elements in actual phrases for the March-quarter 2025 (gray bars) and the June-quarter 2025 (blue bars).
- Family consumption expenditure progress accelerated.
- Export progress outstripped import progress – so web exports had been constructive.
- The federal government sector expenditure – consumption rose whereas capital fell.
Contributions to progress
The next bar graph exhibits the contributions to actual GDP progress (in share factors) for the principle expenditure classes. It compares the June-quarter 2025 contributions (blue bars) with the earlier quarter (grey bars).
- Family consumption expenditure added 0.4 factors (up from 0.2 factors).
- Personal funding expenditure added nothing (down from 0.1).
- Web exports added 0.5 factors (up from -0.2) – the 0.5 level export contribution outweighed the -0.3 factors import subtraction (bear in mind constructive import expenditure progress constitutes a lack of progress).
- Total authorities contribution was zero – the recurrent contribution (0.2 factors) offsetting the capital contraction (-0.2 factors).
Materials dwelling requirements rose 0.5 factors within the June-quarter
The ABS inform us that:
A broader measure of change in nationwide financial well-being is Actual web nationwide disposable earnings. This measure adjusts the amount measure of GDP for the Phrases of commerce impact, Actual web incomes from abroad and Consumption of mounted capital.
Whereas actual GDP progress (that’s, whole output produced in quantity phrases) rose by 0.6 per cent within the June-quarter, actual web nationwide disposable earnings progress rose by 0.5 per cent.
How will we clarify that?
Reply: The phrases of commerce had been unfavorable within the June-quarter however we offset considerably by the rise in compensation of staff (COE).
In per capita phrases, actual web nationwide disposable earnings improved by a small margin (0.11 per cent) for the quarter and by 0.39 per cent over the yr.
Because the March-quarter 2022 (when the restrictions beginning stress-free), the decline has been 2.9 per cent.
Family saving ratio fell by 1 level to 4.2 per cent
The RBA tried to wipe out the family saving buffers because it hiked rates of interest hoping that this would scale back the chance of recession.
In fact, that course of attacked the lower-end of the wealth and earnings distribution, given the rising rates of interest have poured hundreds of thousands into these with interest-rate delicate monetary belongings.
Households then turned cautious – lowering total expenditure progress and rising their saving out of their disposable earnings.
That behaviour modified once more this quarter with spending progress outstripping the expansion in disposable earnings.
The next graph exhibits the family saving ratio (% of disposable earnings) from the December-quarter 2000 to the present interval.
It exhibits the interval main as much as the GFC, the place the credit score binge was in full swing and the saving ratio was unfavorable to the rise in the course of the GFC after which the newest rise.
An rising saving ratio gives the family sector total with an elevated capability to threat handle within the face of uncertainty.
The subsequent graph exhibits the saving ratio since 1960, which illustrates the best way through which the neoliberal interval has squeezed family saving.
Going again to the pre-GFC interval, the family saving ratio was unfavorable and consumption progress was maintained by rising debt – which is an unsustainable technique provided that family debt is so excessive.
Although the ratio has been rising barely in latest quarters, it’s nonetheless nicely under previous ranges.
The next desk exhibits the influence of the neoliberal period on family saving. These patterns are replicated around the globe and expose our economies to the specter of monetary crises way more than in pre-neoliberal a long time.
The consequence for the present decade (2020-) is the common from June 2020.
| Decade | Common Family Saving Ratio (% of disposable earnings) |
| Sixties | 14.4 |
| Nineteen Seventies | 16.2 |
| Nineteen Eighties | 11.9 |
| Nineties | 5.0 |
| 2000s | 1.4 |
| 2010s | 6.6 |
| 2020s on | 8.6 |
| Since RBA hikes | 3.5 |
Slight acquire in productiveness progress
Actual GDP rose 0.6 factors within the quarter, matching the expansion in working hours.
Which implies that GDP per hour rose barely (0.1 per cent on rounding).
The modest progress in labour productiveness finish three consecutive quarters of declining productiveness progress.
The ABS launched extra detailed productiveness progress information this quarter, which can permit us to be extra exact by way of understanding which sectors are contributing to the malaise.
I’ll present a separate evaluation of it as soon as I’ve absolutely understood the brand new framework.
However the proof to this point is that productiveness progress within the:
- Market sector – 0.3 per cent (annual), 0.49 per cent (quarter).
- Non-market sector – minus 0.1 per cent (annual), 0.42 per cent (quarter).
- Total – 0.1 per cent (annual), 0.3 per cent (quarter).
The next graph presents quarterly progress charges in actual GDP and hours labored utilizing the Nationwide Accounts information for the final 5 years to the June-quarter 2025.
To see the above graph from a distinct perspective, the following graph exhibits the annual progress in GDP per hour labored (labour productiveness) from the start of 2008 to the June-quarter 2025.
The horizontal pink line is the common annual progress for the reason that June-quarter 2008 (0.77 per cent), which itself is an understated measure of the long-term development progress of round 1.5 per cent each year.
The distribution of nationwide earnings – wage share rose
The wage share in nationwide earnings rose 0.2 factors to 54 per cent within the June-quarter 2025.
It hasn’t been that top for the reason that September-quarter 2016.
The revenue share fell to 27.1 per cent (down 0.2 factors).
The residual is basically the federal government share.
The primary graph exhibits the wage share in nationwide earnings whereas the second exhibits the revenue share.
The declining share of wages traditionally is a product of neoliberalism and can finally should be reversed if Australia is to take pleasure in sustainable rises in requirements of dwelling with out file ranges of family debt being relied on for consumption progress.
Conclusion
Do not forget that the Nationwide Accounts information is three months previous – a rear-vision view – of what has handed and to make use of it to foretell future traits isn’t easy.
The Australian financial system grew by 0.6 per cent within the June-quarter 2025 (up from 0.2 per cent) and by 1.8 per cent (up from 1.3) over the 12 months.
GDP per capita progress turned constructive after a number of consecutive unfavorable quarters.
Family consumption expenditure progress strengthened and led the sturdy progress in home demand.
Total, a surprisingly strong consequence.
Clarification on terminology
I advocated a degrowth technique for the worldwide financial system total provided that our footprint is 1.7 occasions the capability of the biosphere to regenerate.
To realize that technique, provided that many poorer nations should proceed to develop, would require slightly substantial minimize backs in spending and consumption within the richer nations.
Once I analyse the Nationwide Accounts information or any expenditure/output information, I write as if progress is ‘good’.
However that terminology is used within the context that with out financial progress and with none substantial shifts in earnings distribution and authorities transition insurance policies, making an attempt to pursue a recessionary technique would harm the weakest members of our society disproportionately.
In some respects, I’m abstracting from the damaging actuality of our ecological footprint.
That’s sufficient for as we speak!
(c) Copyright 2025 William Mitchell. All Rights Reserved.