Spending spree drives economy
The economy grew by 4.1 per cent over the past year, fuelled by record corporate profits and consumer spending which is at its second-highest level in 27 years. Both companies and consumers are benefiting from low import prices and high export prices. The past year has seen a 7 per cent increase in disposable income, much of which has gone to companies whose profits have increased to 26.5 per cent of total national income. The expectation that profits will continue to grow has spurred additional business investment. Household saving has improved although Australians are still spending more than they earn.