The Morrison government gave us a recession we didn’t have to have
Labor leader Anthony Albanese has been mocked for describing Australia’s economic downturn during the pandemic as the “Morrison recession”, but the September-quarter rebound, recorded in the national accounts released today, suggests that in some ways he is right. The better-than-expected 3.3 per cent growth – the best quarterly result since 1976, coming after the worst quarter since records began – signals that Australia is officially out of recession, going by the crude definition of a recession as two quarters of negative growth. In the March quarter, the economy contracted by just 0.3 per cent, before collapsing 7 per cent in the June quarter. Quite possibly, if the Morrison government had been quicker to announce its JobKeeper package – and Labor was calling for it at least as early as March 22 – and if it had moved more quickly to support the bushfire recovery as The Australian columnist Peter van Onselen argues today, the negative number in the March quarter might have been avoided.
Van Onselen writes, “The only reason the government didn’t pump prime the economy as the first quarter growth numbers sagged, largely off the back of the bushfires, was because it didn’t want to jeopardise its precious surplus.” Perceptions do matter – in 2009, the Rudd government only dodged a “technical recession” after the GFC by a decimal point, after all.
The good news is that the economy appears to be bouncing back strongly – if not exactly “snapping back” – driven by increased household spending, which rose 8 per cent as more normal trading resumed in hotels, restaurants and cafes (except in Victoria). When Albanese opened Question Time this afternoon by asking why the government was congratulating itself given a million Australians remained unemployed and wage growth was at record lows, Treasurer Josh Frydenberg fairly jumped up to answer. “The only person who is disappointed in today’s national accounts is the leader of the Opposition,” Frydenberg said, “because today’s national accounts show that the economic recovery is under way – the economic recovery that every Australian has worked hard for. And the congratulations go to every Australian who has made sacrifices in order to see the resilience of our economy produce the result that we have seen today.” Frydenberg crowed that the effective unemployment rate, which peaked at 15 per cent at the worst of the shutdowns, had halved to just over 7 per cent, and the participation rate – covering those in work or looking for work – was back to the same level as at the start of the pandemic.
The treasurer trumpeted an upgrade to Australia’s economic outlook from the OECD, which now thinks our economy will shrink by 3.8 per cent in 2020 (previously 4.1 per cent). “This compares favourably to an average fall of 5.5 per cent across all advanced economies,” Frydenberg said. At the same time, RBA governor Philip Lowe told the House Economics Committee that while the year had been extremely difficult, “we have now turned the corner and a recovery is underway”.
In the real world – just as in 2009 – it still feels like a downturn and Australia faces a slow grind out, with a higher jobless rate expected to persist well into next year. Shadow treasurer Jim Chalmers said today’s figures – coming off last quarter’s very low base – were “cold comfort” for the 2.4 million unemployed or underemployed Australians, and added that “what looks like a recovery on paper will still feel like a recession. What really matters is not one quarterly GDP number on a page but how Australians are actually faring and whether they can provide for their loved ones.”
“Last summer’s disastrous season of bushfires has made it abundantly clear that we’re rapidly speeding towards a climate cliff. This was a chance for Australia to show it is serious about climate action ahead of next week’s international climate summit. Thanks to the Liberals and Labor, we have failed.”
“One source, who claimed to be in direct contact with the person hired to tail Mr Porter, told senior figures in the Morrison government a third-party hired by the ABC had paid for the surveillance to be conducted by a Sydney-based private investigator. They said it was done ‘at arm’s length’.”
Making apparently unsubstantiated claims, some anonymous sources get a big run in The Australian even though Four Corners has categorically denied using private investigators.
Hostage diplomacy: Freeing Kylie Moore-Gilbert
In 2018 Australian academic Kylie Moore-Gilbert
was arrested and sentenced to 10 years’ imprisonment in an Iranian jail. Last week, she was released in a diplomatically fraught prisoner swap involving four different countries.
The number of people in South Australia who had used the “gay panic” defence over the past decade, in an attempt to have their murder charges downgraded to manslaughter. Today, SA became the last state to abolish the defence.
“We’ve argued successfully at every stage that the Federal Court has the jurisdiction to hear these claims. Today, the High Court agreed. This decision vindicates the right of our clients to seek justice for the cruel and inhumane treatment that they suffered … [The] government tried to slow down the course of justice, and they failed.”
George Newhouse, principal solicitor and director of the National Justice Project, speaking after a win in the High Court, which ruled that the Federal Court has the power to hear the cases of more than 50 refugees and asylum seekers.
“The pandemic squeezed Australia’s culture – politics, the arts and sport – into one claustrophobic space where only politics could be heard. It was an inevitable function of lockdown. The live theatres and stadiums, the cinemas and galleries, where cultural memory is formed and shared, were off limits. Although streaming services filled some of the void, and the football codes managed to complete their seasons, the arts did not stand a chance. In 2020, politics had first call on our devices and television sets.”
“Weekly we’re reminded of the rare impunity enjoyed by our elites – actual elites, and not those with an obscure Twitter account or a precarious gig in academia. The quality of our governance is too often held hostage by unfit and fevered egos, those ruled by their will to power or their fear of obscurity.”
“Why are there so few babies being born in Australia? If you answered ‘coronavirus’, you’re not wrong, but also a long way from being entirely right, for Australians have been increasingly disinclined to procreate for a long time. The last time Australia’s fertility rate was above 2.1, the generally accepted ‘replacement rate’ necessary to stop the population from declining, was in 1975.”
Paddy Manning is contributing editor (politics) at The Monthly and has worked for the ABC, Fairfax, Crikey and The Australian. He is the author of Body Count: How Climate Change Is Killing Us, Inside the Greens and Born To Rule: The Unauthorised Biography of Malcolm Turnbull.
Labor leader Anthony Albanese has been mocked for describing Australia’s economic downturn during the pandemic as the “Morrison recession”, but the September-quarter rebound, recorded in the national accounts released today, suggests that in some ways he is right. The better-than-expected 3.3 per cent growth – the best quarterly result since 1976, coming after the worst quarter since records began – signals that Australia is officially out of recession, going by the crude definition of a recession as two quarters of negative growth. In the March quarter, the economy contracted by just 0.3 per cent, before collapsing 7 per cent in...
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