Joe Hockey rejects Peter Costello's warning that Australia's economic luck is running out as demand for resources falls

Updated

Treasurer Joe Hockey has dismissed warnings from his former colleague Peter Costello that Australia's economic luck is "beginning to run out".

The country's longest serving treasurer argues the economy is undergoing a major restructure and is fearful that China's appetite for resources is tapering off.

"We went on with rising living standards right through 2008, 2009, 2010, 2011 after an initial readjustment and Australia boomed in a way we've never seen before," Mr Costello told a property council event in Sydney.

"But the luck's beginning to run out."

Mr Costello said the economy was undergoing big changes, and he believed consumers were being left with a sense of uncertainty about the future.

But Mr Hockey told ABC TV's 7.30 program he remained "fundamentally an optimist".

"I think Australia is on the threshold of its greatest ever era - but whatever prosperity we're going to have in the future we're going to have to earn," he said from Cairns, where he was attending a meeting of G20 finance ministers.

Mr Costello also said that falling commodity prices meant Australia's economy would not be protected by China like it was during the global financial crisis.

The former treasurer said for the first time since the 1990s, per capita incomes in Australia were no longer growing.

"Young people under 50 who have lived through a period of uninterrupted rising incomes are beginning to experience something that's different," he said.

"Now I'm not saying that we're in recession, far from it. But things are changing and our consumers are anxious - they've stopped spending."

He gave a more upbeat assessment of the property market, suggesting Australia's strong population growth would continue to sustain it.

"Building a house is comparatively cheap," he said.

"What is expensive in Australia is land."

Hockey declines to grade his performance

Meanwhile Mr Hockey declined to give himself a mark for his first year as Treasurer.

Prime Minister Tony Abbott reviewed the performances of his ministers and said he had given marks ranging from "A" to "A plus".

The Treasurer told 7.30 he would leave the public assessment to commentators.

"We've delivered what we promised we would deliver. We are now in the business of building a stronger Australia and we’re absolutely determined to do that as a team and as individuals," he said.

Asked if he had room for improvement, Mr Hockey told 7.30 host Leigh Sales that "everyone has room for improvement".

"I'm no different to anyone else. I'm absolutely determined to deliver what is right for my country and we're going to do it," he said.

Opposition Leader Bill Shorten expressed surprise at the grades Mr Abbott handed out.

"Has he really rated them A or A plus? Oh my lord. Well, sounds like anyone could front up to the Abbott class and get a good mark," Mr Shorten said.

Topics: economic-trends, business-economics-and-finance, government-and-politics, federal-government, industry, mining-industry, australia

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