Shadow treasurer Joe Hockey says the Australian economy is operating very well, but unexpected growth in gross domestic product (GDP) should signal a winding back of government spending.
The Australian Bureau of Statistics says GDP grew 2.7 per cent in the year to December.
Forecasts had been for 2.4 per cent.
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GDP growth in the final quarter of 2009 was a seasonally adjusted 0.9 per cent.
Mr Hockey says now that economic growth is heading back to trend the government should cap government spending growth at two percent.
Treasurer Wayne Swan says the growth in the Australian economy in the last three months of last year makes Australia the envy of the developed world.
"These accounts represent a very solid outcome for the economy for an economy which is the envy of the developed world," Mr Swan said.
The treasurer said the growth was vindication of the government's stimulus measures.
"To have grown the economy in what has been one of the toughest years since the 1930s is a truly remarkable feat and the stimulus is providing a firm foundation for the economy.
"These are very pleasing numbers," Mr Swan said. "They give us cause for optimism."
Mr Swan said private sector demand was starting to pick up as the stimulus was progressively withdrawn, but he admitted the construction sector remained weak.
