Terry McCrann: Why nation’s recovery depends on Victoria
When Australia plunged into recession in the June quarter the brutal reality of businesses shuttering and workers losing jobs was like nothing we had ever experienced. Now one thing will limit how far and how quickly the nation snaps back, writes Terry McCrann.
Terry McCrann
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OK, what we all already knew is now official. The Australian economy plunged — and I mean plunged — into recession in the June quarter.
This was no technical recession, some statistical concoction; but the sort of brutal reality of businesses shuttering and workers losing their jobs and consumers not spending that is completely outside our experiences and any normal expectations.
GDP fell by a completely — even the accountant-like people who calculated and released the figure used the word in their official release — ‘unprecedented’ 7 per cent.
If we reported the figures the way the Americans do, we would have been saying our economy shrank at an annualised rate of 25 per cent. That’s to say if it kept going, in a year the entire economy would be just 75 per cent the size it was before all this happened.
Just how ‘unprecedented’ this was is shown by what happened at the worst point of the Global Financial Crisis back in 2008. Then the economy shrank by 0.5 per cent. This was 14 times worse.
Now, it’s important to understand, that right now we are in the middle of similarly unprecedented surge in GDP.
That’s ‘we’ as in Australia overall. The 25 per cent of Australia in Victoria is in a completely different, separate and still-awful state, thanks to the Andrews overnment’s quarantine disaster and its stage four ‘house-arrest’ lockdown.
Both the figures we saw today and where we are headed all does pivot on Victoria.
For starters, when we these same national GDP figures for the September quarter in three months time, they will show something like — also, completely ‘unprecedented’ — a 4-5 per cent leap in GDP.
The leap-back is not and was never going to go anywhere near making back the ground lost in the June quarter. That’s because the entire Australian economy remains in some sort of lockdown.
But the national leap-back is going to be much weaker, because of Victoria. The rest of Australia will come back to a certain extent. Victoria won’t — right now it’s still at the bottom of the cliff. It’s also limiting how far and how quickly the rest of Australia leaps back.
Bottom line we will still be — we still are — in recession. We will still have double-digit (in real terms) jobless numbers. We will still have tens of thousands of businesses shuttered or shattered.
That’s the case for the whole of Australia. In Victoria, it’s just that much worse.
Originally published as Terry McCrann: Why nation’s recovery depends on Victoria