An expert has warned Australians are going backwards financially on a per-person basis despite economic growth remaining positive, as new figures reveal a steep downturn.
Australia's economy grew by just 0.3 per cent in the March quarter, a sharp slowdown from the 0.9 per cent recorded in the previous three months.
The latest figures have raised fresh concerns about the economy, with Christian Baylis, founder of Fort Lake Asset Management, warning the official figures do not tell the full story.
Baylis said Australia would typically aim for economic growth of around 2.5 per cent a year.
"We like to be growing typically at about two-and-a-half per cent per annum, and that typically means that people are taking a bit more out of the economy," he said.
While the economy remains in positive territory overall, Baylis said GDP per capita, which measures economic output per person, painted a more concerning picture.
"If we look at each individual, we're actually going backwards. That was actually negative 0.1 per cent," Baylis said.
"What that means is each individual person's share of the pie is actually going backwards. And the only thing that's keeping our heads above water from a growth perspective is actually bringing people into the country."
Baylis said Australia was entering a productivity recession, with workers producing less output per hour despite wage growth.
"That's basically not a good thing to put on the shopfront window for the nation," he said.
He argued policymakers should be focused on encouraging productivity growth, particularly among small and medium-sized businesses.
"You don't go out and whack the parts of the engine room of the productivity engine. You basically want to give that as many incentives as you possibly can," he said.
"The timing of the budget versus what's actually going on with the productivity side, you couldn't have worse timing."
Baylis also warned increasing pressure on productive sectors of the economy could have unintended consequences, including discouraging business investment or prompting some operators to move offshore.
He said business owners could increasingly look to jurisdictions such as New Zealand or Singapore if Australia becomes a less attractive place in which to invest and grow.
