Australia hasn't had a recession since 1992 - I was too young back then to be affected.
There is talk that a recession is likely in the near future.
For those who were adults, can you share any experience about what happens during a recession for the average person? Any personal experiences of what happened during that time? Did you lose your job and couldn't find another one? Did your business suffer? Did it have no noticable difference to your life at all?
I was marched into my piano teacher's home as a crying 3 year old boy who was really too young to start piano but the classic Malaysian parent attitude of 'the sooner the better' overcame all!
Ohhhh you meant in terms of job and property/investments etc? My bad………
Yeah "For those who were adults" but this is still funny, sorry about the downers :/
How are you on the piano now?
What I remembered most about the recession of the early nineties was the amount of empty shops around Perth.
Not just in the city but in the suburbs as well.
Well…it's happening again in Perth CBD.
Funny thing was from Freo-Rocky region was doing better thanks to some civilian ship building/dry-docks and Naval contracting. That was the mini-boom of Waikiki, Secret Harbour and Mandurah a couple of years later.
Source: I was an RAN contractor in the area.
I agree - but look at all the other shops and retailers opening up, shopping malls being upgraded
Swings and roundabouts
I don't even recall a recession in 1992. At worst, for me, there was no wages growth. My partner and I both had good jobs -she in Local Government as a community worker and I was at Qantas as a workshop scheduler/planner. I bought a house around then for what my parents thought was crazy money in a "slum" (Mum's words) but was actually Glebe Point, Sydney. I had no problems getting a loan but had ~50% deposit from a tiny house I sold 12 months earlier.
There were pretty much running recessions through the '80s. 1979 then 1984, then 86, then 89, then 92.
I left school in '79 and got an apprenticeship in a government program as there was a skills shortage and high unemployment. When i finished that in 1983 my tradesman's wage in private enterprise was only $10 more than my apprentice wage with the federal government and only went from ~$330 in '82, peaked at $400 in '86 and dropped to ~$370 in '89. It was fairly easy to get some casual cash work & both my partner and I had 1 legitimate job and 2 cash jobs running for a lot of the time.
Money was hard to borrow right through the '80s.
My partner and other friends that did Uni and finished in 1984 all had problems getting jobs in their field. That lasted through to 1986? My partners first job was a government program
The highest interest i paid was 14.5%
There was 1 couple that I recall was really struggling but they tended to make poor choices in how they spent money and also took a few risks with jobs, bought large blocks of property, made poor housing choices, had unplanned families, etc. I recall one year they lived at Katoomba and they'd sunk all their money into a 2400sgm block with 2 street frontages and we went for dinner in winter and all the dinner guests were asked to bring wood for the fire as they couldn't afford firewood.
NB: we didn't have mobile phone plans, foxtell, spotify, monthly insurance payments, etc.
We cooked at home a lot.
We were vegetarians to save money.
We had a lodger in our spare room.
My partner drove a 15 year old Mitsubishi Galant. I had the "good car" which was a 1971 Chrysler, 1979 Commodore, then a 72 beetle,71 Fairlane, a Lancia Beta then we splurged and bought a brand new Barina. (I bought non-runners, fixed them and sold for a profit)
It entertains me to consider the items on that list my kids would consider essential or unacceptable that we just considered routine.
And your grandparents would say the same thing! Sigh, baby boomers :|
I think my parents would be pretty positive about a lot of changes, Dad used to get ice delivered for the fridge at home when he was little, and my grandparents were starting their lives in the depression. My grandfather survived for another 30 years after a heart attack that would have killed him if it happened a decade earlier.
But our family still don't eat out much or get take away beyond the occasional pizza, much like them. This certainly isn't the average in my corporate workplace, or my older kids lifestyle.
The huge change has been in consumer spending for marginal return.
When I was a kid in the 1980s, our middle class home had many fewer "things". Older houses from then have 2 power points, because what was there to plug in?
The TV, and a heater in winter in my lounge room.
A lamp in my room. A bit later a tape deck.
Now I have power boards everywhere for all the gadgets and things. The desk I am at has about 12 sockets in use for computers, printers, monitors, chargers, phones, audio etc.
Some of these things are great! But en masse, they have added up to a really substantial amount of cash and impact on the environment. It is the same in my cupboard, where I own every item, or shed where I have tools I use once a year or less. For $100 I can own that little used chainsaw, rather than borrowing it once a year. I have 20GB of music. My parents had 20 albums. My kids pay every month for every song ever released.
The number of new cars is extraordinary - it used to be interesting to see a German car, because they were few. After all, the only way an average person could afford one would be to borrow money that took as long as the car would last to pay back, and that is no way to get ahead. But now we call it a lease, and 90% of new cars are bought on finance.
If you genuinely believe there is not a substantial amount of extravagance and waste in what is presented as today's average lifestyle, I don't know what to tell you.
It does offer the ability to bring forward some types of enjoyment, but it also magnifies the risk if something goes wrong.
Six months of unemployment in 1992 was tough.
The dole bought more, and commitments were low. You could eat frugally, skip a holiday, not buy any clothes and piece together enough income to keep your house, because you could cover a mortgage and eat even on casual wages and a bit of welfare.
Today, six months of unemployment with monthly commitments for mortgage, car payments, health insurance, other insurance, phone plans, gym memberships, service subscriptions etc is much harder.
What do you tell Toyota finance when you have 3 years left on the loan, or Optus when the plan has 18 months remaining?
Who is buying an ex-lease Audi if unemployment has just spiked?
And they could both be right.
I was a kid, but my older cousin had to go and work overseas for a couple of years while his wife and kids stayed in Australia. He was still working for the same company, but their work in Australia dried up. The separation was hard on his family, but they were financially ok because he kept earning a decent salary.
My Mum took on a part-time job. My Dad was self-employed and his work slowed down, but the combination of them having savings, being careful with money and my Mum's job got them through ok.
As a kid I didn't really notice any difference. We still had our house, food, clothes and I didn't feel deprived in any way.
I was at uni.
Beer was $2.40, smokes $5, petrol was about 60c.
VB throwdowns $20 a box.
Lots of free gigs, or go to the leagues club on free movie night.
Almost everyone I knew worked in retail, and there were jobs available.
Tradies had jobs.
The roundie did $1 drinks on a Tuesday, that was big.
We didn’t holiday overseas, most of my friends didn’t own a car, my living expenses were peanuts.
Most friends I knew lived with parents or shared a flat. A 2br was $160/wk.
Credit was super hard to get, and 30% deposit was pretty routine, so many fewer property “investors” and most people were paying off pretty modest mortgages. A typical mortgage would have been around $50k, so even with 15% interest it wasn’t a big deal.
The people who lost their jobs were mainly people in the big “jobs for life” companies that had begun to feel international competition. Suddenly, all these privatised ex-government businesses discovered they didn’t need all these bodies. For example, Telstra has shed something like 75% of the staff it had in the mid-nineties.
I don’t think it was a very severe recession.
I thought Australia was "the only country that never had a recession" —except of course the world-wide great depression.
We're the only country (in the OECD) who haven't had a recession since '92. We're on the brink of one now, the only thing keeping growth above 0% at the moment is population growth.
Not sure why the negs, but that was literally what is repeated over and over by people.
How do we have population growth, I thought we were having stagnant/reduced birth rates, so is it just influx of immigration?
@Kangal: I haven't heard anyone say that we've never had a recession. People saying that must have short memories.
Our population is still growing through reproduction, and we have a fairly steady intake of immigrants.
@Kangal: Yes, immigration is what is keeping the economy afloat.
They arrive, they have to buy a household full of goods either 2nd hand or new. They will take any job. They work hard.
I can't work out why the government would cut back the numbers
@brad1-8tsi: Further: children are expensive for the government. Hospitals, maternity leave, childcare, education, tax benefits, etc. These are all costs to the government. Adult immigrants come over and are (generally) ready to work without requiring all this money.
You can argue all you want about population caps or "Australian Culture" being diluted, but, working age immigrants are an economic benefit overall.
@macrocephalic: I would describe children as a long term investment by society in general.
Families should be aiming for 2 (or 3) if they can. They provide a lot of employment;-)
@macrocephalic: They're a benefit over 20-30+ years for sure. The tax they pay ends up offsetting the expenditure. The problem is when the rate is high, the initial impact on things like infrastructure isn't yet offset by their tax take. Also adult immigrants tend to have children while here or bring families with them.
Day 1 an immigrant arrives they're adding to the required infrastructure, but haven't paid much tax yet. Obviously if you sell them furniture, food, housing etc, you benefit immediately, but the general population and government revenue takes a while to catch up with the taxpayer spend required.
@macrocephalic: The immigration stats you hear quoted are for 'primary skilled applicants', i.e. the person with a skilled work visa. These people do typically pay for themselves.
The problem is they usually come with an unskilled partner (secondary skilled applicant), a bunch of children, and sooner or later a couple of elderly parents. These people are a net negative, as the government has to pay to educate them, pay for infrastructure, medicare, pension etc, despite the fact they've never, and will never (with the exception of children) pay a cent in tax.
@brad1-8tsi: Are we cutting back legal immigration? I don't think bringing in qualified workers is a problem, it's the illegal immigrants having bucketloads spent on them that don't make a contribution that's an issue. I hope those numbers are being cut back.
@SlickMick: Yes, the permanent (pre-arranged / legal) migration cap. It was capped at 190k in 2012 but that cap isn't always reached.
Morrison announced in November 2018 that it was being revised to 160k. That was in a speech at AGNSW so I'm not sure if it made it to policy.
Illegal immigrants is a debate I'd rather not start due to a lack of knowledge and understanding of the issue except to say that I find it odd that if you arrive by plane it's "OK" but if you come by boat it seems to be a whole new set of rules.
I do have a friend that works in the refugee industry and it's a lot like the charity industry. Make your own conclusions on that.
@brad1-8tsi: Okay, I agree with skilled immigration, don't know why we'd want to reduce that unless we have the same skills locally but not enough opportunities.
The difference will legal/ illegal immigration isn't the mode (plane/ boat) but visa vs no visa.
@SlickMick: I don't agree.
If you fly here as a tourist or student and then eventually claim refugee status (hence illegal as you've come here on false pretences) on arrival you are treated quite differently than if you arrive via boat and claim refugee status.
Even the skilled migration list is flawed. According to the government we have a skills shortage in Environmental Scientists and an immigrant gets extra points if they have that qualification. My daughter has an Environmental Science degree (HD average, Dean's list), additional qualifications and work experience and has been trying to find employment in her field for 9 months without success so I'm not sure where the shortage is.
@brad1-8tsi: illegal is illegal. If you work without permission you should be deported. If you come without a visa, you should be deported.
I agree that we should focus on employment for our own children first. I started working as a graduate, and was soon training the next intake. For the last couple of decades, companies I've worked for have wanted experienced staff but none are willing to train. If you don't contribute to the market, you can't expect to take from it.
I'd put a big import tax on labour, and incentives to take on trainees, but I don't think enough people would vote for me to fix the country.
@SlickMick: Compared to the States, Australia has very few illegal immigrants…a lonely island we are! More like overstayed people I guess.
Ahh yes, I remember now, my father had been working at Telecom for a number of years and took a redundancy package. He was saying that the more experienced staff were taking voluntary redundancy because it wasn't worth it for newer staff. I was about 10, but my father always had plenty of money for essentials and whatever else. No trouble finding another job. If that's the reason for the redundancy I think it was actually a good thing for our family.
What I remember of that time period, I was very young then but quite aware of my parents and surrounding.
In all honesty even in this day and age I dont feel that people with a simple existence are overwhelmingly impacted by economic down turns.
Well said. The key remains to maintain a simple existence. But to each their own. Good luck to us all.
3: Bunnings back then in WA is called WA Salvage, wonder how many still remember that one in here? Vote my comments so I know a rough numnber
6 is important. We spend so much time on social media looking at the lives of others, where they portray the very best portions of their existence. Everyone seems to be having more fun than you, more holidays, more neat stuff. It can make one feel very depressed.
Back in the 80s/90s people compared themselves against those living next door, or someone they personally knew. Now people are engaged in a race to get more stuff than others living 8000km away. People that matter nothing to you, and people you'll never meet. It can lead to depression.
I was also young at that time, but I have a few comments
- Jobs were difficult to find but they were available.
It's flippant to say that jobs were available when unemployment suddenly jumped to over 10%. The effect of that recession was that many middle class breadwinners were unemployed for a significant period for the first time in their lives. The available jobs were taken by experienced workers on a lower salary than they had previously. This meant that the less experienced job seekers who would normally have got those lower level positions were still unemployed.
- The main source of petrol was leaded, not unleaded.
Yep. Only cars sold after 1986 had to use unleaded so that meant that cars more than 5 years old in 1991 were running on leaded.
- Everyone had food to eat, while it was a recession it was not a survival do or die apocalyptic scenario where people were on the street screaming and protesting.
Unemployment benefits were a bit more generous in those days which probably helped many families weather the recession.
- It was either safer or kids were more wiser then, I am yet to figure this out. I.e. I used to walk to school alone and there was no rampant crime.
Crime rates were not too different, possibly higher in those days. Perceptions have changed and the currently safety culture means that most parents won't let their kids walk or ride to school like we did. Then as now, most crimes committed against children occur in the home or in institutions (see the Royal Commission), not on the street.
- Not a lot of people drove new or good cars. They did but they were not as widespread as it is today i.e. every second P plater drives a golf or i30.
New cars are now much cheaper in real terms since tariffs have been mostly eliminated. These days it costs a lot more to maintain an older car. In 1991, the older cars were from the 1970s, mechanically simple, no fuel injection, antilock brakes, pollution reduction equipment, air bags and so on - much easier for the home mechanic to maintain. The other effect is the safety culture - these days it seems that a lot of parents will buy (or assist their purchase of) a new car for their kids because they want more safety features for their own peace of mind.
10 Think you will find that really is just a false perception. crime was significantly higher, what wasn't higher is access to information about it so people were less aware of crime rates and reporting of crimes was also a lot lower. predators out for kids were as prevalent back then as they are now, we just didn't see a lot of public awareness.
Built a house, 5 acres for 50k 4 bedroom house for 80k, give me those days back even with 17%.
What was your income?
If you were making $35k per year, it sounds okay, just save up and pay it flat. But if you were making only $10k, then its worse than now.
Most of the retail jobs at that time was getting around $22k a year. So the house is only 2 and half times by then, now? Well, you know the story……………
Yes I do know the story sadly, and it ain't double/multi storey :)
The petrol was 53 cents if I remember correctly, no GST yet.
The good old time of Holden, my dad owned a good one that time.
I wanted to go to the US where my grand parents were living but had no money.
No GST but there was all kinds of different Sales Tax, some are as high as 22%
One of the pluses was sales tax was on the wholesale value, which could be as little as 30% of the retail value….
It was a bit more than that.
Mr Cumming said that in the Gulf War of 1991 the Melbourne petrol price rose from 65 cents to 80.7 cents a litre. In the first quarter of the next year it was 69.1, and fell to 65.1 in the second quarter.
I think it was 1999 when the outrage of $1 a litre fuel came in. Everyone was pissed
You shouldn't be drinking it.
I graduated from Uni, and couldin't fnd a proper job in my field for 9 months. Worked at my parents cafe PT. Sent out alot of resumes. Internet only in infancy. Managed to get a job through a lead from my girlfiriend's dad. That was always only a temp job as the guy was working from home in his garage. I still kept looking. Got an interview for a position with 10 years exerience. The directior thought I was brash as I had no experience, but thought he'd give me an interview. Got the job and have prettty much worked since. Some in between time, but only weeks.
Ironically one of my uni mates in same course was working in the frame shop below my office. That's all she could get
Alot of my grads did other courses, like masters. Tried to find other areas to get work.
Internet only in infancy
The World Wide Web was only a curiosity in Australia.
And I recall sending and receiving e-mails was in a 24 hours cycle … and using a dial-up 2400bps modem.
In the USA was different and most universities were connected. For research that is, no pron.
And the girlfriend is now the wife? :)
Yes.
How times have changed
Not finding a job in your field for 9 months is considered normal now
Well I think that was my case. For some others it may have been longer or they gave up.
i was and am still self employed, it wasnt a great time then, seemed to always be working for companies that were downsizing into a smaller space with less staff, a bit like the current business environment, by 1993 you could lease a whole floor in a high rise in Adelaide terrace for outgoings only as the owners were tired of paying the outgoings on empty floor space. there was a lot of people struggling to hold onto a job. no mobile network provider did deals that included a handset, my first 3 mobiles from the early 90s cost me about 2K each, all they did was made and received calls and you paid thru the nose for the privilege.
Final week of year 12. School excursion to the CES to register. I remember money being much tighter back then but that's family of 4 with 2 parents working in low paid jobs compared to just me now.
Casual jobs seemed easy to get but full time jobs were tough. That said, TAFE were still viable back then and apprenticeships were well funded.
We did have a great social security system. But we should remember Labor introduced hecs and austudy loans, and mutual obligation and detention centres. So… Politically, some of the "othering" games were similar, if not so crude.
New Zealand was seen as an exotic overseas destination, no one I knew had a passport, and passion pop could be bought for $2…and it was fairly easy to walk into the bottle shop and get served underage.
Sizzlers was big. And cheap. Ten dollars.
In regional QLD, very little outside fish and chips, old style Chinese etc for takeaway. I still remember coming to Brisbane and marvelling at West end and turkish/Lebanese food.
And regional QLD was very very white and conservative… I know, I know, not a lot has changed, but compared to where we were…
Wasn't austudy loans first year more like 1995?
fairly easy to walk into the bottle shop and get served underage
Not true in Perth. Rules were enforced.
Maybe… It blurs. I know I'm still paying mine off
HECS was introduced under Hawke in 89. I was one of the first lot of uni students to get it. But in fairness it was acknowledged and supported by both parties as free education had become unaffordable with rising population and increased higher education enrollments.
What Happened to You during The Australian Recession of 1992?
I watched a sister and a friend lose their homes due to from memory 18% interest rates.
I was veging as usual so didn't affect me.
I've been working since the 80s and would never have noticed a recession in my life, only the media telling me.
Maybe I was sheltered or lucky, but I don't think anything that's happened in last 30 years can compare to the real recessions of earlier days.
These days, governments will just keep borrowing money to prop up economies. When these debts get called in, that's when we'll see another real recession - it will be called the apocalypse I reckon.
What work/area are you in?
IT
Wow, 1992….. I wasn't even born….that's a long time….
OP, to answer your question:
Nothing happen to me.
Same work, same pay, same portfolio, same everything.
Nada … other than seeing castles built on thin air collapsing. Nothing solid.
Want to share your recession-resistant portfolio allocation? :)
Interested to know too ! :D
At the time for me and parents it was cash. You put every cent you could into term deposits for as long as the bank would permit.
Mmmmm … a 1992 portfolio … pretty irrelevant by now …
1983 recession Perth no jobs Engineering Trades Newspaper job ads then and queues outside prospective employers .1992 there was a push for bank boycott who had monopolies then .
1992 there was a push for bank boycott who had monopolies then .
They don't have it now?
I don't remember this boycott, but I do remember people being upset at state banks collapsing (in SA) and building societies (in Vic) going under.
Couldn't get a job straight out of uni for about 2 years.
Dole queues were going out the Centrelink building snaking down the street.
My brother had 2 degrees and compiled over 200 rejection letters.
Will never vote Labor because of it.
The only upside was 17% term deposits, made a killing.
Couldn't get a job straight out of uni for about 2 years.
Wait aren't you saying in your first line you were unemployed for 2 years? Where did you get your money to do the below?:
The only upside was 17% term deposits, made a killing.
According to RBA data, 1 year TDs peaked at 16% during 1 month in 1989 and were never that high again, so no one was getting 17% (unless they were getting 6 or 3 month TD's which peaked for only 3 or 4 months in the same year at 17%. Which if you picked up those, you weren't really making a killing.)
I dunno. I recall Dad had some 17% TDs and they would have been long timeframes… Maybe I'm mistaken
Could have been state government retail bonds. NT had some great ones back in the day.
@serpserpserp: Nope, he was strictly a bank account / long term deposit guy. A totally unsophisticated investor.
He'd kept all the paperwork but i binned it when he died. As I said, I'm probably mistaken or he bumped the rate a bit or maybe he got a bonus rate as it was a 7 figure sum. (yep, crazy).
@brad1-8tsi: Banks don't bump rates up on higher amounts, it is actually on a curved scale the other way once you hit a certain level of cash.
Who knows, maybe some cowboy bank manager did it for him, back then the processes in a bank were pretty woeful. Imagine if there was a proper royal commission into banks back in the early 90s? There would be a lot of people in jail.
@serpserpserp: It could have been mates rates I guess. He had a lot of mates everywhere (ex-RAAN and ASIO). There was 300+ people at his funeral and a lot of the old guys there I'd never met or seen and they had that straight back, straight legs, military way of standing.
Re: Cowboy managers.
I got my first mortgage in 1982 at the 4th bank I went to after being told there was no way I'd get a loan "in the current climate and because you are only 21". After the loan was granted I asked the manager why he said yes when the others said no.
His reply: "My branch is in an industrial area with few houses nearby. I get almost no mortgage applications and I have a quota to fill and your loan made my quota." It was only $20k and he could approve it without going higher up the chain.
So, are you going to never vote liberal after this recession?
Labor's superannuation legislation, combined with our mineral resources, are what has kept us out of recession since 92.
What was his name?
Kev98
Kev 9.8cm?
Exactly my thought. lol
EDIT: Replied to dlakers3peat
That's depressing
In Melbourne, Victoria it seemed like news of a suicide from the Westgate bridge was a weekly occurrence, everybody seemed to know of at least one family who was leaving the state to go to Queensland to find work, and if it wasn't for the Hong Kong Chinese, Malay and Japanese buyers Melbourne's property market would have completely collapsed. It was rough.
everybody seemed to know of at least one family who was leaving the state to go to Queensland to find work
what are the special work available in QLD than in VIC? I am just curious because I have seen same news during the COVID days. are those work related to agriculture ?
I arrived in Australia, Darling Harbour was run down car park, there were heaps of holes in the ground around the CBD. OH yeh, Ivan Millat spoilt my plans for hitching around Australia,
I was just a kid, but I remember my Dad was under huge stress just to keep the roof over our heads. It was a really hard time for him.
I remember around that time 60 Minutes did a segment on a guy who chose to eat canned dog food to save money. In the interview he invited the Prime Minister to join him for dinner!
Yes i remember that. I remember the guys face when the 60 minutes interviewer asked him why he didn't just eat baked beans which were half the price oO
Couldn't afford to buy Super Nintendo games so we hired them out from video stores over the weekend.
Considering it was released in Australia in 1992 and games were at least $75+ in retail stores (which was HEAPS for a video game back then), this was the reason the rental of video games took off and was pretty massive until the mid-2000s.
And you could rent CD's (and burn a copy at work)
I remember that my Dad was made redundant from his engineering job for a government employer after thirty something years of work in the early '90s. My parents moved us interstate and bought a small business which never made any money, just barely stayed afloat - but sucked up all their time
In retrospect my mother, a school teacher, could have gone back to work and we would have been much better off.
I was too young to understand and of this;I thought we were mode class people when in reality we were struggling to get by for a lot of the '90s.
So many typos, I should read more carefully when I post in the middle of the night
If you can continue to service your debt, the recession probably won't be that bad for you.. you'll probably skimp on some 'wants' but still afford all your 'needs' and live a comfortable existence.
If you can't service your debt, that's when it will get painful. You might have to start trading off between different 'needs'. Eg. Don't pay power bills to keep on top of mortgage.
There are people today who can't service their debts, just think of a recession as adding to that number significantly. Another side affect to this is the consideration on depression and crime.
I think everyone knows the basics.
But usually people can't service their debts cause they lose their jobs in a recession. Can't just skip on your Netflix subscription to fill a thousands of dollar hole per week you aren't getting because unemployment is sky high.
Yes, what happens during a recession is pretty basic
No, Netflix is not a 'need'
Thousands of dollar hole per week?
Thousands of dollar hole per week?
Yes, when you lose a job, you are thousand(s) of dollars a week worse off (for some people maybe that's thousands every fortnight).
It was called CES