Australia now in recession as economy tanks by 7 per cent, with the NT not far behind
AUSTRALIA is officially in its first recession for almost three decades as the economy suffered its worst hit on record – and it’s a feeling the Northern Territory knows all too well.
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AUSTRALIA is officially in its first recession for almost three decades as the economy suffered its worst hit on record.
It’s a feeling the Northern Territory knows all too well, as its economy has gone backwards for nearly 11 quarters in a row, effectively meaning we’ve been in recession since late 2017.
The nation’s 7 per cent quarterly gross domestic product (GDP) slump was three times worse than the previous biggest fall of 2 per cent in June 1974.
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Australia has not notched two consecutive quarters of negative decline, the common definition of a recession, since the “recession we had to have” in 1991.
The Territory’s economy went backwards by 4.9 per cent in the June quarter, suffering the second smallest hit of any jurisdiction in the country behind the ACT, as people stopped shopping, spending money at cafes and travelling, private businesses continued not to invest and all levels of government decreased spending within the public service.
Treasurer Nicole Manison, saying it was clear COVID-19 has had a “devastating impact on the Australian economy”, argued the Territory’s position as the second least smashed state was because the government had “acted quickly to save lives and save jobs” and allowed the NT to “open our economy sooner and rebound”.
However, the NT’s economy has been going backward since September 2017, bar the quarter in December 2019 when the economy took a snap inhale and grew 0.3 per cent.
Economist Saul Eslake said the NT’s economy had effectively shrunk 4.5 per cent in the 2019/2020 financial year compared to Australia’s overall dip of 0.8 per cent.
The Australian Bureau of Statistics noted the smack to NT’s economy was “partly offset” by a 20.4 per cent increase in alterations and additions to homes driven by Territory recovery policies, namely the $100m Home Improvement Scheme.
Mr Eslake said the percentage increase was large but the NT was playing with small numbers – spending on home renovations went up from $93m to $125m from the previous quarter to now.
If this hadn’t occurred, he said the NT’s economy would have gone backward by 5.4 per cent instead of 4.9 per cent.
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Nationally, Treasurer Josh Frydenberg warned the latest figures hadn’t factored in the economic impact of Melbourne’s second lockdown and this would “weigh heavily” in the September quarter – to the tune of an estimated $10bn to $12bn.
“Behind these numbers are heartbreaking stories of hardship, being filled by everyday Australians as they go about their daily lives,” he said.
“The road ahead will be long, the road ahead will be hard.”
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