Mathias Cormann is optimistic that low interest rates, tax cuts and record employment will provide a positive outlook for the Australian economy.
“We continue to work very hard to put the Australian economy on the strongest possible foundation trajectory for the future,” the finance minister told Sky News on Friday.
His comments came after the Reserve Bank governor said it was reasonable to expect an extended period of low interest rates, “whether or not further monetary easing is needed”.
“On current projections, it will be some time before inflation is comfortably back within the target range,” Philip Lowe told a Sydney audience on Thursday.
He said the central bank board was strongly committed to delivering an average rate of inflation of between two and three per cent, dismissing suggestions the target band should be lowered.
Westpac chief economist Bill Evans revised his outlook for interest rates this week, predicting a further cut in the already record low cash rate of one per cent to 0.75 per cent in October rather than November.
He also expects a further reduction to 0.5 per cent in February 2020.
Senator Cormann conceded global growth continues to be subdued, while Australia has faced downside risks from the impact of drought and floods.
“Lower interest rates, combined with our $300 billion-plus in income tax relief … as well as our record investment in infrastructure and skills, all together will continue to put the Australian economy on the best possible foundation trajectory for the future,” he said.
Australia must put itself in the best possible position to deal with global headwinds and seize opportunities as they come its way.
“That’s how Australia has secured a position where we’ve had 28 years of continuous economic expansion,” Senator Cormann said.
“Our government is very focused on continuing to build on that.”
Trade Minister Simon Birmingham will be in Beijing next week for multilateral trade talks.
Australia and others are trying to land a deal on an ambitious 16-country trade pact known as the Regional Comprehensive Economic Partnership (RCEP).
The free trade pact includes the 10 member states of the Association of Southeast Asian Nations (ASEAN) as well as Australia, China, India, Japan, New Zealand and South Korea.
The deal – which does not include the United States – is considered increasingly important after President Donald Trump pulled out of the Trans-Pacific Partnership.
Senator Cormann said it is about getting better access to key markets in the region for Australia”s exporting businesses.
“It’s about getting better access for our products and services.”