Infrastructure: Don’t believe the hype

Australian Treasurer Scott Morrison made a big song and dance about new infrastructure spending in the Federal Budget. But while he shouldn’t be considered a public enemy as some new infrastructure spending is better than none, the package announced on Tuesday won’t boost economic growth much. With other evidence suggesting that dwellings investment and consumption are both faltering, we still believe that GDP growth will slow from 2.5% last year to just above 2.0% this year.