Australia has just technically entered a recession on a per capita basis based on the second straight quarter of economic decline, according to the latest figures.
Statistics from the ABS show that Australia’s economy has slowed from 4 per cent at the start of 2018 to around one per cent in the second half.
This result has driven Australia’s economic growth last year to 2.3 per cent, making it below the Reserve Bank’s predicted 2.8 per cent growth.
On a quarterly basis the December quarter was 0.2 of a percentage point, which was in line with CBA, Westpac and ANZ who all forecasted 0.2 of a percentage point for the quarter.
The figure was well below the 0.6 of a percentage point that the Reserve Bank forecasted but RBA governor Philip Lowe downplayed the figures.
“If you look at other indicators of the economy you don’t see that slowdown.
“The labour market data suggest the economy is growing quite well,” said Mr Lowe at the AFR Business Summit.
This meant that, technically, Australia is in a per-capita recession but due to population growth that is not the case.
However, this has not stopped pre-election talks of one with the Prime Minister stoking the flames of a “recession” fire.
Mr Morrison told attendees at the business summit that a vote for labor would constitute an “economic lead in the dark”.
“I’m saying the economy will be weaker under Labor – that’s exactly what I’m saying,” said Mr Morrison.
Mr Morrison was asked if Labor would plunge Australia into a recession if elected.
“Whether it goes to the extent that you’ve said, well, history would show.
“I’m trying to ensure that we never know the answer to that question,’ he said.
When pressed further by reporters in Canberra Mr Morrison doubled down on his views of a recession.
“Whether that could extend to those types of outcomes (recessions), that will be more likely under Labor than it would be under a coalition government,” he said.
Mr Morrison said that Labor’s policies, particularly surrounding industrial relations would be the cause of a weaker economy.
“They’re (Labor) going to put $200 billion worth of taxes and take Australia’s industrial relations system back to the times when we had recessions in this country,” he said.
Opposition leader Bill Shorten hit back at the claims saying that the system needed to change.
“I believe we need to renovate the system to revive negotiation and co-operation.
“Our wages system, our remuneration system needs to be renovated to prepare our workforce for an economy that will change as much in the next 20 years as it has in the last 100 years.”
Labor’s pledges around weekend penalty rates and pattern bargaining for lower sectors would result in Australians having more money to spend said Mr Shorten.
“Getting wages moving isn’t a war cry of class warriors. It’s a fundamental economic imperative.
“And fixing it is going to require us to return to what has served Australia best – co-operation.”
Labor Treasurer Chris Bowen called the Prime Minister’s language reckless and irresponsible.
“It is highly irresponsible for any Prime Minister, any Treasurer, any politician to talk down the economy like Scott Morrison has talked it down today,” he said
Eliot Hastie is a journalist at Momentum Media, writing primarily for its wealth and financial services platforms.
Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.
Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).
You can email him on: [email protected]omentummedia.com.au