Treasurer Scott Morrison said the figures demonstrated the resilience of the Australian economy. Treasurer Scott Morrison said the banking system is the economy's greatest asset. Credit:Alex Ellinghausen "A generation of Australians have grown up without ever having known a recession," he said following the release of the results. "That's a tremendous national achievement, but it's not one we can take for granted." Commsec chief economist Craig James said the "record expansion remains on track". "Especially positive is the health of the business sector with business conditions the best in nine years," he said. "The hope is that employment and investment will continue to lift, maintaining economic momentum."

The economy defied the expectations of some analysts who anticipated weaker exports, the impact of Cyclone Debbie and government contributions would result in a negative quarter result. Shadow Treasurer Chris Bowen accused Mr Morrison of using "hollow rhetoric". Credit:Andrew Meares But Wednesday's result also saw the economy slump to its slowest pace since 2009, with year on year growth of just 1.7 per cent. Mr Morrison said growth could not be taken for granted and conceded "many households continue to do it tough". Shadow Treasurer Chris Bowen accused Mr Morrison of using "hollow rhetoric".

"The Australian economy is currently experiencing the lowest annual GDP growth since the Global Financial Crisis," he said. "Australians looking for work and opportunity will take no consolation from Scott Morrison's 'better days ahead' credo". Wednesday's result was driven by an increase in household expenditure contributing 0.3 percentage points to GDP, while government consumption contributed 0.2 percentage points. economics Subscribe now on iTunes: It All Adds Up - Fairfax Media's new podcast about everyday In housing, all states except Victoria showed a fall in dwelling investment in the three months to March. NSW demand was flat following a 0.7 per cent increase in the three months to December. Electricity, gas, water and waste services grew by 3.1 per cent in the last quarter, its largest increase since 2009, while agriculture contracted by 5.6 per cent, after having one of its strongest years on record.

Transport also had a solid three months rising 2 per cent. The largest quarterly rise for the industry since March 2013. Commonwealth Bank economist Gareth Aird said there was continuing risk of weak wages growth, below target core inflation and an expected continued downturn in commodity prices. Mr Morrison said the federal budget had revised down its GDP estimates, and growth forecasts would continue to be monitored carefully every six months, but stood by the predicted sharp rises in growth over the next four years. "I note yesterday the Reserve Bank Governor also restated his expectation for growth to increase above 3 per cent in the next couple of years, and I also note that what I would describe as modest growth in the figures today, for the March quarter, were anticipated in the budget," he said.

In its statement on monetary policy released on Tuesday, the Reserve Bank said growth was expected to return to more positive territory in the next two years as Australia transitions through the final stages of the mining boom. Mr Morrison said low wage growth "remains our most important economic challenge," and highlighted falls in dwelling investment and the impact of Cyclone Debbie, which is also likely to hit next quarter's economic growth. The Treasurer urged Labor, the Greens and Senate crossbench to "meet us in the middle" to pass economic reforms aimed at stimulating the economy. He said the major bank levy would be a legislative priority when Parliament returned next week, followed by the school funding package and the instant asset write off for small business. He would not say when the Medicare levy would be introduced, but pointed out it did not need to be made law for a little more than two years.

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