https://www.heraldsun.com.au/business/australia-all-but-cert…
https://www.news.com.au/finance/economy/australian-economy/a…
After 29 years of straight growth the lucky country is officially in recession - I have never known a period of 'negative' economic growth what happens now?
How do we return to 'positive' growth?
How long do you think it will last? what should we expect?
To all my fellow Australians finding themselves struggling i wish you all well and hope it gets better soon
China
D.Trump
After 29 years of straight growth the lucky country is officially in recession
Australia is a lucky country run mainly by second rate people who share its luck. It lives on other people's ideas, and, although its ordinary people are adaptable, most of its leaders (in all fields) so lack curiosity about the events that surround them that they are often taken by surprise.
What are you talking about? We are experts at breeding animals and digging holes, and that's enough for the 21st century.
When you put it like that, it sounds like we're bogans.
Being a bogan has nothing to do with your profession. As you can see by all those bogans driving German cars.
Australia used to be a lucky country decades ago.
I don't know how you can argue it's a lucky country now after four decades of the nation's median income falling because the nation is an oligarchy according to WP and the ABC.
https://www.abc.net.au/news/2015-08-26/frijters-foster-battl…
What you on about? We got almost the highest minimum wage in the world. Lucky if you can get it!
When you do get minimum wage you look at what you can buy. Not a lot!
The Median income is NOT falling, it a growing nicely.
https://www.abs.gov.au/ausstats/[email protected]/mf/6333.0#:~:text=S….
That link shows extremely low growth, barely above inflation.
I guess this is what it's like to call out fake news on ozbargain with proof of evidence and nobody cares lol
median income falling
US incomes have stagnated since the 70s, so maybe that is the stat you are referring to, but Australia routinely grew incomes well ahead of inflation until about 2012. Since then income growth has tracked around inflation, a touch ahead.
So incomes aren’t growing very fast, but they haven’t been falling at all, and certainly not for decades in Au.
I don't know/care if we are a lucky country - it's a nonsense statement anyway. We are a great country though that is an incredible place to live. Sure, we could be better but life's good here for the majority. I'm happy with my lot.
Still ahead of the oils rich countries where do u think they will be in 100 years ? Yep rembered as those who won the lotto and were broke a year later.
as long no more lockdown we wil be fine.
What is wrong with you dude?
How quickly you forget that if it wasn't for people like me, who fought for the government to take in refugees, you and your family wouldn't be here.
@[Deactivated]: Really, you were at the UN forcing Australia to take in refugees seeking asylum? Must've had some decorated career in your lifetime.
Aussie government was eager to invite more Christians here back then. Was a piece of cake getting in. They even gave us a complimentary bible on arrival <3
SlavOz on 14/05/2020 - 15:56
Ughh that's enough of the racism thanks mate. I'm actually brown skinned and born Muslim.
Those 19 people who have negged my comment don't want people like you here and don't see you as their equal because of the colour of your skin. And you know it. It's up to you what you do about this: do you keep creating fake Caucasian personas online and lie about who you are in the hope that they will like you or do you join the fight against racism and discrimination and help make the world a fairer place for everyone, you included?
Just to add, those 432 Aboriginal and Torres Strait Islander people who have died in custody, died AFTER the 1991 Royal Commission into Aboriginal deaths in custody. Not a single person has ever been held criminally responsible for this violence.Not a single government in Australia has taken responsibility and implemented all of the Royal Commission's recommendations made almost 30 years ago, or the numerous expert reports' recommendations that have been made since.
The peaceful marches that are happening in Australia are to show that we are united with the Aboriginal And Torres Strait Islanders and people across the world fighting for an end to racist laws, discriminatory policing, mass imprisonment and a call for accountability for deaths while in police custody. We are fighting the good fight.
Having Scott Morisson acknowledge what is a reality for many Australians and offering to do something about it, would go a long way towards negating the need for Australians to protest and risk a 2nd wave of infections and prolonging the recession. The ball is in his court.
I predict you are about to be very disappointed.
Lockdown or not here, the global headwinds have baked in sub#par growth for quite a while.
stonks go up
afterpay ATH now over $51 (from $8 back in March)
everyone still spending , even more than before
It's great, all the people with nothing to do at home taking up share trading, now the stocks are overvalued again just like pre covid. Wait till the quarterly revenue numbers are printed that show the decline and the missmatch in forward earnings/company valuation and watch as it unravels on itself.
current numbers indicate the stock market is back to normal and forward earnings are hunky dory. Couple this with a housing market teetering on the edge and i feel the worst is yet to come when the banks have started hedging themselves.
People will jump off, while the ones who can't afford it will be left struggling to stay afloat.
It's great, all the people with nothing to do at home taking up share trading
The smart people are working. Who is share trading at home?
I agree with the rest. People are just naive and doesn't know how to Google what happened during / after the Spanish flu.
@Drakesy: If you're not smart enough to be working then it means you're going to run out of cash trading pretty quickly. That is my point.
Opening accounts doesn't mean people are necessarily day trading. Comsec pocket is basically ETFs and ETF isn't really designed to be traded, there is no leverage there either.
Inflows from people trading due to boredom would barely register as a drop in the bucket.
There's also this from your link:
ASIC's analysis found that in the focus period, on more than two thirds of the days where retail investors (average punters) were net buyers, prices declined the following day.
The inverse also happened - on more than half the days where retail investors were net sellers, their share prices 'more likely' increased the next day.
Retail investors are definitely not driving the market.
Those figures are only for the March quarter; everyone is resigned to the June quarter being most likely very worse.
So no recovery in sight.
Yeah, the hoarders artificially inflated GDP numbers. But that will make the June quarter worse…
It sort of points to how pure GDP is a terrible measure.
Per Capita GDP has been on declining trend for a while now too… (And don't forget the supposed sliding retail purchases for a while now pre-Covid)
And the bounce from purchases in early Lock-down are now offset by reductions in spending afaik.
Australia has been in recession for at least 12 months prior to Covid19, anything less is just mouldy fairy floss. If the economy was doing fantastic then the official interests rates would not be where it is - close to 0%
But … news.com.au is a bastion of Financial advice, surely?!
Absolutely, we've been on a large decline for a while now with no officials willing to say it prior to today.
How can any officials have said there was recession when the data didn’t support it?
I think it's more that we've been on a downward GDP decline per capita whereas just pure GDP was inching ahead… And of course people pointed that out before but no politician would bring that up…
It's ok, just open up the immigration taps and manufacture economic growth, how bad can it be…
Oh wait the taps are frozen shut…
GIVE poor people (those on less than $200k) $25,000 to put in a new kitchen! that'll fix it.
Frydenburg, you genius.
Australia has been in recession for at least 12 months prior to Covid19
Don't tell the people that. They would be mortified that house prices won't be going up.
Except the data just simply doesn’t back that up.
Retail sales growth is not the definition of a recession.
The data does back that up. Unfortunately when the government and media talk about recession what they actually mean is a Technical Recession (i.e. 2 quarters of negative growth) and don't really take into account the current health of the economy. So technically no we haven't been in a recession, but the reality is our economic health has been on the slide for some time.
That’s the point - the comment we’re responding to says we’ve been in recession for 12 months. The data doesn’t back that up. Does the data show that economic growth has been sluggish? Sure. But until the March quarter, it had still been consistently positive. How do you get recession out of that? So no, the data doesn’t back that statement up.
Depends on how you define recession.
My understanding is that a recession is defined by two consecutive quarters of negative economic growth. The low interest rates has been contributing to preventing that prior to Covid.
Exactly, who are they kidding we were in a recession since last year they just never officially declared it.
Somewhere between 3 days and 30 years.
Can you give us an update on Friday?
Yes. I will give you an update on a Friday.
I'll let you know on a Thursday which Friday that will be.
Friday 3rd 2050?
I think it's going to be LONG. Because we don't really have any innovation, we just export commodity items, natural resources and food.
innovation, we just export commodity items, natural resources and food.
So if we can make people each and crap out commodities and natural resources we got innovation.
CSL isn't doing too bad at the innovation front. Afterpay is just rehash of the old buy now pay later dressed up as innovation, until their customers find out it is on their credit file.
CSL isn't doing too bad at the innovation front. Afterpay is just rehash of the old buy now pay later dressed up as innovation
Why not address a potential root cause? If we keep allowing universities to dumb down to match the 'ability level' of international students, we're depriving our domestic potential future innovators from fulfilling that potential. That article might be behind a paywall. Four Corners has also documented the state of Australian universities, which seem to have prioritised profit over values, and are betraying Australian students and Australians more broadly.
There's a role for those institutions: help domestic students build their futures and nourish the minds of potential innovators in hibernation.
Maybe that can help Australia to be more "innovative"?
We have a few universities in the top 50 in the world therefore is it the universities dumb or the students dumb?
If Michael Cannon-Brookes is an Australian billionaire, the co-founder and co-CEO of the software company Atlassian decides to go the US. Our top 10 ASX listed companies dominated by super markets and banks, maybe the country likes old industry. Like pre-rocket era type of stuff.
Maybe people were a bit stupid before entering university, they lived 18 years outside before going into uni.
@netjock: Sorry, I don't get your point. What's your main point?
We have a few universities in the top 50
They didn't get that rank because of education standards, it's due to research output.
Why not address a potential root cause?
Main point is maybe if you want to look for a root cause look at how people are bought up in the home. Universities are a tool, don't blame it on 4 years of uni.
Universities are a tool
An expensive one that's not very effective then.
What's the goal of university? Definitely not to profit off "un-equipped" domestic kids, as you seem to be suggesting, and providing them with a subpar education.
So what's in Australia's best interests then?
And sell houses to each other.
I have never known a period of 'negative' economic growth what happens now?
Remember 2008/9. Do some reading. Australia's been a two speed economy for the last 10 years. Only commodities, tourism and overseas student education is doing any good. When commodities went bust look what happened to Perth.
How do we return to 'positive' growth?
Just fudge the numbers like they have to make people feel good. The developed / advanced economies are in low growth because they are buying Chinese imports. China is awash with surplus which they are lending back to western consumers and exporting deflation (cheap products). So in the end you end up with a house full of Made in China products and up to your eyeballs in debt to China. China lends money to our companies and earn interest on that, essentially we're cash cows getting milked.
How long do you think it will last? what should we expect?
3 to 7 years. Higher rates of unemployment. Slow slide in prices. But expect real asset prices to rise because at 0% interest rates people will chase returns: higher house prices and stock prices (potentially). This will take money out of the economy which means consumer prices will go down. If you want an example look at the UK. Since 2008/9 house prices have doubled, central bank rates at 0.25%, inflation at 1%, retail sales static (with COVID19 it is now gone).
What happened to Perth?
When commodities went bust look what happened to Perth
we are now, once again, the only engine in the economy. #WAXIT
How well is that engine going to keep running with the escalating trade war with China?
"The developed / advanced economies are in low growth because they are buying Chinese imports. China is awash with surplus which they are lending back to western consumers and exporting deflation (cheap products). So in the end you end up with a house full of Made in China products and up to your eyeballs in debt to China. China lends money to our companies and earn interest on that, essentially we're cash cows getting milked." INCORRECT ASK ANY ECONOMIST. Cheap China goods contributed to low inflation throughout the world for decades.
" Only commodities, tourism and overseas student education is doing any good. When commodities went bust look what happened to Perth." TOTALLY CORRECT BUT YOU OFFERED A CONTRARIAN ARGUMENT TO THE ABOVE. Nearly all of that comes from China but China is in negative growth. Australia is the only country totally dependent on China. Long before the pandemic, Price Waterhouse calculated if China goes down the unemployment will grow to 500,000.
ScoMo is turning to India but does India have enough money? The past investments past 30 years from Indian companies depend on Australia financing or support like free water Adani and the fertiliser plant in WA. A gigantic mansion was being built of a few combined lands. No financing , uncompleted later demolished.
The Liberals especially Marisa Payne who as foreign Minister made mistake to follow Trump and I fear Australia will continue paying for that even when China recovers. There was a spin that what she wanted for is now accepted by WHO. Her argument was very aggressive to the extent the Chinese ambassador threatened retaliation. Remember China depends on the USA not totally but a lot. Australia depends TOTALLY on China.
Now the bans by China on soya beans and beef are going to be raised as complaints to WTO.
IMHO Do not listen to the politicians, widen your knowledge.Twiggy Forrest and Kerry Stokes look after wealth yes but they do not belong to Mars, money comes in to Australia. Politicians depend on BS and lasting as long as possible for the pensions and later to serve on boards of companies. All forgotten by the public with short memories.
China is awash with surplus which they are lending back to western consumers and exporting deflation (cheap products)
INCORRECT ASK ANY ECONOMIST. Cheap China goods contributed to low inflation throughout the world for decades.
Deflation (your computer gets cheaper every year or same price but higher performance) is LOW inflation. Ask any economist. Just not you.
Nearly all of that comes from China but China is in negative growth
What are you on about? It seems like you don't know the difference between deflation / inflation / lower GDP growth and negative GDP growth.
IMHO Do not listen to the politicians, widen your knowledge.
Probably need to listen to your own advice.
The last half of your post I have no idea what you are on about. If I didn't know better I'd say you've probably paid for by the Chinese government to write this.
Australia isn't totally dependent on China. If we reduce our reliance on China the trade off is quality of life.
you've probably paid for by the Chinese government to write this.
Kinda funny that you say that, @netjock. Your "advices" are not in the best interests of Australians; they lean more pro-CCP.
Australia isn't totally dependent on China
Yet, you contradict yourself by recognising that our tourism and overseas education is "doing any good" because of a dependency. Look at the statistics. Because of that reliance, we've taken a hit.
As per my earlier post to you, and in this Four Corners report, Australian universities' addiction to international students is hurting our domestic students by dumbing down and censoring free speech.
This clip nicely summarises what chasing "international" money is like: The Return of Fingerbang.
Only commodities, tourism and overseas student education is doing any good
Untrue. Because of that reliance, we've been hit.
Australia needs to diversify. We'll be better off in the long run, and the world will adapt and adjust, as it always has.
Anyone who lived through the last recession will tell you we have not reached that point yet.
We have been in a recession for a long time. Immigration has disguised it.
Immigration is literally the only reason we have not been in a recession.
If the definition of a recession has not changed, then what does it matter what 'disguised it'? You can't just say 'oh we are in recession but banks disguised it', 'oh we are in a recession but retail disguises it', that is ridiculous, of course if you take away anything that contributes to economic growth - even immigration - then yeah sure the numbers will be worse.
I don't get this place sometimes, the general vibe of the comments is 'we have been in recession for years' but then on the flip side seem to think there will be carnage, sky rocketing unemployment etc. So if things have been that bad for years, why would it get worse because someone uses the word recession in an official capacity?
Not quite right.
Askme69 is correct in the phrase of "disguised". As an analogy, let's say two similar people get an infection. They're both same sex, age, and seem similar from the outside. However, where one is physically, nutritionally, and immune fit, the other is not. So when the infection starts they both exhibit different responses.
The economy can be like that. Although you can have slow net gains overall for a few quarters, factors such as a volatile income, cash printing, class divide, cost of living disparity are all underlying symptoms.
There's a growing sentiment since about 2014 that our nation has gotten less healthy until 2019. So a recession was expected in 2020 naturally. Covid19 has just been the straw that broke the camel's back, and the scapegoat many businesses and politicians will use. Now it depends largely on how the populace will react to this new challenge, will most people pick up the slack, work hard, and make compounding improvements? Or will they slack off, or cause protests and riots and civil unrest? And on top of that, will political and business leaders take advantage of the generated work, and make smart business decisions for the future of the nation? Or will they simply increase their bottom line, and start printing money to help the short-term at the expense of the future? And then there's other things like infrastructure, innovation, and intellectual property, etc etc.
So I'm trying to say "it's complicated" and that it is very possible to disguise a bad run of things. I don't have all the data to say that's what has happened, and by what lengths of margins, though you get the idea.
We have been in a massive debt fuelled bubble for the last ~13 years.
This is how bubbles pop.
We will most likely have positive growth again in the September quarter as restrictions continue to gradually ease and more businesses reopen, so technically that’ll be the end of the recession (the quarters of negative growth). Unemployment will remain elevated though and will take years to get back to 5% or below.
A recession is a technical term. I think you really want to know when will things return to the good times of prosperity and security? That is a slightly different thing.
Have you seen all of the empty shops on any street in any city? They are all over the place. I cannot remember seeing so many in my lifetime and I’m close to retirement. I have news for you - there will be a hell of a lot more before the year is out. This is just a symptom of what we are in for. As things turn around the”recession” will technically end but from a very low point so it will take a long time for things to return to normal - whatever that will be. Some people won’t even notice it because they will have security of work and enjoy the cheaper prices that going out of business sales can bring as businesses compete with the ripple effect of that dynamic. Others will Not even look at these sales because they cannot afford anything over and above their subsistence levels.
Here is my tip to anybody who is choking in debt and has nothing of real value. There are a lot of people in this position. Declare bankruptcy now. That will get rid of all of your debt and all of the stress. You can then live on what you get from your wages or your jobseeker payment and have a little to spare. Why would you pay back thousands of dollars that you will never get anything back for? Banks and lenders make provision for bad debts in times like these and you are just a dot on their list of people to harass. They want to get you off the books. If that is too strong of a thing for you to do and you can’t pay your bills go to your lender and offer them a deal with a reduced balance. 20% of the debt to them is better than you going bankrupt and not paying anything. I know this sounds ridiculous but trust me, it works sometimes. You may have to sign a non disclosure document sometimes but you can pull it off. Especially for those loans they offered you that you never wanted but took anyway and the money is all gone. NOW is the time to clear the decks. If you are a bad debt you will be written off by the lender and the debt will be sold for a small percentage of the value to debt collectors. THAT’S when life will get hard for you. These guys use all sorts of harassment strategies to cause you pain and anguish. ALSO once you have a bad credit record paying off the debt won’t change it. It will only keep you poor. So don’t just sit there and wait for the inevitable crash of your life. Deal with it now. Be proactive then go and enjoy your daily latte again.
Here is my tip to anybody who is choking in debt and has nothing of real value. There are a lot of people in this position. Declare bankruptcy now. That will get rid of all of your debt and all of the stress.
You have a point.
Most people don't get how the business cycle works. After all the bankruptcies the economy is at the bottom. Then it takes time to build up capital (savings) and with savings and a record banks will be willing to lend (leverage) and that is then spent in the economy causing above average growth rates. Notice how growth is through debt.
Notice how the GFC came crashing down when those sub prime loan holders can no longer service those loans. With any recession it is inability to service debt that causes the collapse that takes all the capital.
Few years ago I started looking at my sources of cashflow: salaries, shares, property etc and tried to balance it. Who knew COVID19 means some shares stopped dividends, taking a cut on rental income (it is global not a few countries). The bank might give you a payment holiday in theory but your interest is just deferred cash outflow.
Currently it is just the beginning.
A recession is technically defined as two consecutive quarters of negative GDP growth (though I agree we’ve been in non-technical recession for close to a decade). We had -0.3% growth (0.3% shrinkage) in the March Qtr, and the govt is predicting ~-10% for the June Qtr, Hence we are likely in technical recession now. How long will we be in technical recession? It’s not a question of how long until our economy recovers to pre-COVID GDP, rather it’s when will it stop shrinking. Failing a second virus wave (or race riot, floods, war, etc), this could occur in the Sept Qtr, otherwise probably in the Dec Qtr. Of course some indicators take time to wash through the economy, such as forward orders, but is unlikely the economy will continue shrinking beyond a few months.
All comes down to immigration. I.e., when the gates to Oz open again and more people can move here.
When the immigration component is removed from y-on-y GDP we have not been recession free in the last 30yr period.
RULE ONE
NEVER EVER BELIEVE WHAT YOU HEAR OR READ IN THE NEWS
They ALWAYS dramatise everything otherwise it would be boring and you wouldnt read or watch it
Better to listen to the opinions of the wise OB community
I've crunched the numbers and looked over the graphs and I reckon more than 8 days.
This is will be in the media 8 days before voting for the election starts…
Let me add that Australia has been in recession FOR YEARS!
The GDP figures are FAKE FAKE FAKE
If you look at the GDP per capita figures which are the ones that really count because these are the only ones that reflect our standard of living they have been negative for years. But they dont publish these any more!
The only thing propping up our GDP figures is IMMIGRATION
But as we all know high immigartion has a very high negative effect on the community and is very costly for governments because much more infrastructure is needed. And that doesnt solve the crowding problem.
But now we wont have any immigration for a long time.
Hence as long as immigration is low or zero Australia will remain in RECESSION my friends.
Take note of the drastic actions from the banks, the RBA, the states and the Federal govt. Never ever in my life have I seen such PANIC at ALL LEVELS.
Fake News
All hail the Great Economic Managers - the LNP.
TBH really thought this will be far worse than GFC. However to my surprise the markets is on the way up, aussie has crawled back in value and its looks like fast recovery. Its awesome to see the recovery but wondering if the real bad stuff is yet to happen. House prices are still a joke !!
The Australian Economy has caught the Wuhan/Kung Flu , interesting times alright…
Meanwhile, ASX continuing to rally LOL, fake news.
So economy is in coma, nothing works but shares keep going up? That's the real fake news.
Everything is fake news. It will all be okay in the end. Always is.
It's people gambling on stocks.
Australia is not in a official recession, we probably are but it is a defined event, 2 negative quarters in a row. We most likely will be in one but it is not up to Frydenberg to say we are in one, it is the job of the ABS.
Everyone will be in some sort of recession. I can feel it lasting quite some time. Here in the UK, we're slowing starting to come out of lockdown, but the economy is completely broke. We can;t get the clothing we need, the retailers cancelled all their orders for clothing - forgetting that people still need to buy clothes and stuff.
GDP growth is what your asking, its obvious that there was going to be 2 quarters of negative production. Will there be a hard rebound in numbers i hope there is and it looks like its going be that way however i don't have a crystal ball.
we are going deeper in this shithole
I've experienced two recession in my lifetime and it is not a great feeling especially if you living on your saving.
which 2? 2020 and 1991?
Sad world we're living in. Property is over priced, wages are stagnant. Taxes are high. We live to work not work to live
It will depend on what is happening in the rest of the world.