But RBA governor Macfarlane has a different view. One consequence of the GST was to bring forward housing spending to the first half of the year, with investors and home buyers seeking to dodge its impact. But this resulted in a 15.4 percent slump in housing investment in the last quarter of 2000. Business investment was a major contributor, recording a fall of 10.6 percent in the December quarter and knocking more than one percentage point off the growth rate. The accounts figures also showed a build up of unsold inventories, raising the fear that this will cause a further contraction in the current quarter.
International trends point to a further downturn.
Net exports contributed 0.2 percentage points to growth in the December quarter, and provided half of the 2.1 percent increase in growth over the year. But this was before the developing global slowdown, in particular the contraction in the US and Japan, which will have a significant impact on export revenues in the coming months. One immediate consequence of the contraction has been to spark a further fall in the value of the Australian dollar. In international trading on Wednesday, the dollar went down to 50.87 US cents, barely above its all time low of 50.7 cents. And there are predictions that if the dollar falls below 50 cents it will not stop there.