The latest report from Deloitte Australia says the economy is doing OK, with a low Australian dollar keeping the tourists coming to our shores.
But Australia’s national income growth is well below trend, thanks to a "crush on commodity prices" and record low rates of wage growth, the report says.
“The mining construction surge of the past decade continues to fade fast, keeping overall production growth below trend,” the Deloitte report says.
"The resultant crush on commodity prices and record low rates of wage growth mean that, although production growth is only a bit below trend, national income growth is a lot below trend."
However, jobs growth is strong, Deloitte said.
"In turn, good news on the production front is part of the reason why the job numbers are sweet," the Deloitte report said.
Deloittte's report says China’s slowdown is having a negative effect on the budget.
“The economy may be OK, but the federal budget isn’t,” the Deloitte report said.
“So the Treasurer has two stories to tell – the one around the economy can be optimistic, but that around the budget shouldn’t be.”
Treasurer Scott Morrison has reassured Australians the economy remains "very sound" despite global volatility, with more than 300,000 jobs created in the past year.
Mr Morrison says the government's plan "is exactly as we need it to be" in the face of volatility in financial markets and a slowdown in the Chinese economy.
