Australia has no economic plan: Labor

Shadow Treasurer Jim Chalmers says the latest OECD forecasts show the Australian economy is weak.
Shadow Treasurer Jim Chalmers says the latest OECD forecasts show the Australian economy is weak.

Shadow federal treasurer Jim Chalmers says new forecasts for the Australian outlook show the Morrison government does not have an economic plan.

In its interim Economic Outlook released this week, the Organisation for Economic Cooperation and Development slashed its growth forecasts for Australia.

It now expects Australia to grow at just 1.7 per cent in 2019, only slightly above the 1.4 per cent recorded in the year to June, and lower than a forecast 2.3 per cent expansion in its Economic Outlook in May.

It also cut its forecast for 2020 to two per cent from 2.5 per cent.

The Paris-based institution says growth in Australia has moderated by more than expected this year, in part due to persistently weak global trade.

Dr Chalmers said these downgrades were larger than those for the US, the UK and G20 as a whole.

"These updated forecasts make a mockery of (Treasurer) Josh Frydenberg's comments that the Morrison Government has the right policy settings," the shadow treasurer said in a statement on Saturday.

"Weak growth like this is the inevitable consequence of a Liberal government with a political strategy but not an economic plan."

Last week's rise in the unemployment rate has fuelled expectations of a further interest rate cut by the Reserve Bank in October which would see the cash rate lowered to a fresh record low of 0.75 per cent from one per cent.

The central bank and others have urged the government to do more to help stimulate the economy, such as a further boost to infrastructure spending.

The government is adamant it is doing enough.

But Labor's infrastructure spokeswoman Catherine King and cities and urban infrastructure spokesman Andrew Giles said in a statement the government is doing nothing to 'bust congestion'.

They say while the government spent $11.4 million on pre-election ads spruiking its so-called 'congestion busting" infrastructure, it failed to invest a cent from the Urban Congestion Fund.

"Prime Minister Morrison did not spend a cent from the Urban Congestion Fund in all of 2018-19 even though $40 million was forecast to be spent in this year's budget," they said.

Australian Associated Press