Bravo, Australia, we must be a miracle economy

YESTERDAY'S national accounts tell us that Australia's output grew by 2.7 per cent in the year to March. Yet they also tell us that output per head grew just 0.7 per cent.

That's the true bottom line of this patchy, incomplete recovery, swollen by population growth at a 40-year high and that big government stimulus.

On these figures, all the growth in the March quarter came from government investment; on those schools, halls and gyms.

In the past year virtually all our growth came from the public sector, with the private sector flat. On the trend figures, which are less bumpy and more reliable, consumer spending is growing in line with the economy. Housing is recovering slowly and business is buying a bit more equipment but doing less building.

In the past year, domestic demand grew by a robust 4.3 per cent. Yet private sector spending grew just 2.3 per cent, whereas public sector spending shot up 11.1 per cent.

We all wish it had been money better spent. The Rudd government and its public service chiefs should do some serious self-criticism on why it wasn't and write down the lessons, so that next time we need to spend ourselves out of trouble, we do it without sacrificing value for money.

Even so, when the crisis was on, that stimulus kept the vulnerable retail and construction sectors going. Look how weak private sector demand is even now: how much trouble would we have been in without the stimulus?

One last thing. These figures fail to tell a credible story of what happened in 2008-09. They average GDP figures from three data sets: two of them say we went into recession, the third says domestic spending went into recession. Yet our exports boomed while imports crashed.

So we avoided recession by selling more in a world buying 20 per cent less? We must be a miracle economy.