Economic growth slows to a crawl
Posted
Updated
Slow down: Annual growth is now at a six-year low (ABC News: Giulio Saggin, file photo)
New official figures show annual economic growth has fallen to its lowest level in seven years.
The National Accounts show the economy grew by 0.1 per cent in the September quarter, less than the 0.2 per cent quarterly growth rate most economists had been predicting.
If the farming sector is not included, the economy actually contracted by 0.3 per cent in the quarter.
Annual growth fell from 2.9 to 1.9 per cent to be at its lowest level since 2001.
Household consumption grew by just 0.1 pc in the quarter but business investment rose by 1.8 per cent.
The Australian Bureau of Statistics says engineering construction spending contributed to growth, while imports had a negative impact.
Transport, manufacturing, property and finance services also detracted from growth.
Federal Treasurer Wayne Swan says the figures are positive.
"Something like two thirds of OECD economies are expected to contract in 2009 so while other economies are contracting our economy continues to grow," he said.
"So there is more resilience in the Australian economy than in the rest of the world.
"Today's figures show we can't completely resist the pull of international economic forces but we are better placed than many other nations to deal with this global financial crisis."
Mr Swan says that although import growth was strong, export growth was flat because of the impact of Western Australia's Varunus Island gas explosion.
National Australia Bank chief economist Alan Oster says the figures show the Australian economy is bucking thge trend which has put other developed nations into recession.
"It's possible that you'll get a negative quarter at some stage along the track, but the bottom line is that over the last 12 months the economy's gone up by 1.9 per cent so we're still going north which is unlike a lot of other economies.
"But the bottom line is the domestic economy is pretty close to stalling and I suspect the December quarter is not going to be a lot better."
"Broadly I think over the next year the economy is going to be growing by about 1 per cent."
According to Mr Oster's projections, if growth continues at such a low level, unemployment is likely to rise to around 6 per cent by the end of next year.
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Comments (124)
Comments for this story are closed. No new comments can be added. If you would like to have your say on this issue, you can do so via the Emails section of our Opinion pages.
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Billy Bob Hall:
03 Dec 2008 12:13:33pm
Where is the Housing Industry now ? This is the only industry worth saving I was told, because it would "save" the economy ?
(forget about manufacturing industry, it is so 20th century now).Agree (0) Alert moderator
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sojourner:
03 Dec 2008 12:38:47pm
Manufacturing wiped out by low tariffs and the work of the industry assassination commission. RIP.
Agree (0) Alert moderator
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acker:
03 Dec 2008 2:24:16pm
Poorly run manufacturers got and get wiped out by creating businesses that are unsustainable without tarrifs or a government provided edge like 'Workchoices'
Competetive manufacturers need to cut loose and let sink the uncompetitive manufacturers in organisations like the Australian Chamber of Commerce that are trying to grab hold of them and take them under the water with them
Much like a panicked stricken swimmer grabs anyone around them while they are going under
The manufacturing industry needs a clean out, so we can have a sustainable manufacturing industry rather than one on life support moving forwardAgree (0) Alert moderator
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Remark:
03 Dec 2008 12:42:26pm
The Rudd government has tripled the grant to buyers of new dwellings.
As well as helping to ease the housing crisis, this stimulus should fan widely into the more general economy. Architects, builders, real estate agents, plumbers, painters, flooring retailers, painters, pest controllers, landscapers, local government authorities, utilities etc.
The government's Economic Security Strategy puts billions into the hands of pensioners, families and carers, much of which is also be expected to find its way into the hands of retailers and business, increasing business and consumer confidence and bolstering employment at a time when it is much needed.Agree (0) Alert moderator
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cu:
03 Dec 2008 1:07:41pm
Who will lend the money to finance the new homes?
Who would want to borrow money to finance the new homes or already built homes?
Is there a freeze on investment money? If so why?
Its a vicious circle with interest rates falling as people who have saved now get less for their investment. Mostly retirees.Agree (0) Alert moderator
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Remark:
03 Dec 2008 1:26:35pm
Australian banks are among the most stable in the world, thanks - credit where it is due - to the diligent regulation of Howard-Costello.
Though under their economic management, Australian personal and business debt levels became the world's highest per-capita, a gravely unhealthy situation.
Foreign debt also the highest ever under the Liberals. Likewise the trade deficit and housing unaffordability.Agree (0) Alert moderator
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wmc:
03 Dec 2008 1:34:53pm
Unlike governments, that sometimes borrow to fund consumption, businesses borrow for capital investment. In other words, businesses are more likely to borrow responsibly.
Australia doesn't have the ability to finance massive capital expenditure required by industries like mining, so we raise debt (and equity) in international markets. There's nothing wrong with that.Agree (1) Alert moderator
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Blind pilot:
03 Dec 2008 1:41:05pm
Actually, I think that you'll find that the stability of Australian banks is due prinicply the actions of the Hawke and Keating governments. They were after all, the architechs of the boom in our ecomonmy during the '90s.
Agree (0) Alert moderator
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Andrew:
03 Dec 2008 2:19:56pm
Actually I think you'd find that the stability of banks is due to their and APRA's view on the implementatoin of Basel II. This came about well after Keating left.
Unlike US implementations, APRA required higher margins on base tier-one regulatory capital compared to US banks. For this reason, Australian banks were better capitalised which means they are more stable.Agree (0) Alert moderator
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Glasswalker:
03 Dec 2008 1:47:21pm
"Housing Unaffordability"
You are quite correct that the "Housing Unaffordability" Issue is the Fault of the Howard/Costello Govt, the price bubble started when the first home buyers grant was implemented... that matched with low interest rates meant every man and his dog was looking at buying into the market.
Now, due to the Rudd/Swan Govt, we have lower interest rates due to the GFC (not Rudd or Swan's money management) and Rudd/Swan think it's a good Idea to INCREASE the grant... This Grant is what will be the death of the property market in Australia. People willing to pay more for a property than it's realistically worth, borrowing to the absolute limit to afford the house thinking that the Grant can pay back a good chunk of the amount borrowed. this borrowing mentality keeps driving prices of land and properties up... How long before we se something like the sub prime crrisis in the US happening here?
The RBA WILL lift rates again in due course, they always do.. we saw people in trouble as bank interest rates hit 9%+ what happens if we hit 17% like we did during the last recession, you know the one Labor told us "we had to have"?Agree (0) Alert moderator
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drew:
03 Dec 2008 2:08:43pm
debt is far greater now than it has ever been. interest rates wont hit 17% again - or the 20+% mark it hit under Howard in the 80's.
teh recession we needed to have - cut the back of inflation - and helped put us in the economic position we have been in in the last 11 years.
just a pity - howard didnt invest in infrstructure and increasing super up to 15%. he forgot to invest in skills and education.
and opps - he forgot to invest in health and reforming our economy to brace for the inevitable changes we will need to take to help the environment.,Agree (0) Alert moderator
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Amen:
03 Dec 2008 2:34:04pm
Drew, it wasn't Howard in the eighties it was Keating and Hawke who gave us world record interest rates.
Did you protest that we were getting tax cuts under Howard/Costello as well as repaying $96 billion of government debt? No, I didn't think so!Agree (0) Alert moderator
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drew:
03 Dec 2008 3:15:45pm
liberal spinnster dont like facts.
fact is interest rates did reach 20% under Howard as treasurer in the early 80s.
howard was also responsible for the only wages explosion in the past 30 years.
fact: interest rates were 6% by December 1996 (shortly after keating was voted out)
fact: interest rates at 6.75% (and rising) left by howard.
fact: interest rates are 4.25% now.
fact: howard inherited the golden triangle of economics from keating.
fact: personal debt is at record highs.
the list goes on... howard and the liberals are economically a joke. they inherited great conditions after the hard work was down by keating/hawke.
facts liberal party spinnster dont like.Agree (0) Alert moderator
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Celsius100:
03 Dec 2008 2:32:38pm
Irrespective of the blame game issues, houses in the major Australian cities are priced far over what the total value of the inputs necessary to create them would ever be. This country should never have a housing crisis but it has a transport infrastructure crisis which means it will always have a housing crisis.
One cannot commute long distances from smaller country towns to city jobs because public commuting is just not possible given the size of Australia and its poor public transport infrastructure. This has to be fixed and the prices of city real estate must come down. What good is a property if no one can afford to rent or buy it?Agree (0) Alert moderator
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Dennis Argall:
03 Dec 2008 1:54:49pm
Do remember the long term cost of Mr Costello's repayment of official debt: the selling off of virtually every government building except parliament house, so future generations have a rent bill.
Do consider the consequences of the encouragement of fundamental selfishness and consumption through all those years - and beyond: profligate private borrowing, overpricing of real estate, huge private foreign debt.
rein it in boys and girls, the ride is not made more safe simply by more borrow-spend.Agree (0) Alert moderator
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topend:
03 Dec 2008 1:55:20pm
Do you actually work in the PMs communication section ??????
tripling of the grant to 21 000 is a drop in the ocean for an average price of 500k (.5%) you would still need an extra $79k to make the deposit, and then another $30k to pay stamp duty and the cost of all resources has not dropped nor has wages and costs. The end result is that the average person must have a saving of around $130 000 to build a house - a paltry $21000 for first home buyers only doesn't really make much difference.
Secondly the billions works out to not much when distributed to the pensioners, families and carers. it also wont provide much stimulous when people are hanging on to money - its the mind set not the money.
The sea saw interest rates are a direct result of the "inflation genie" touted by labor and the RBA - this fallout from the sub prime crisis was predicted two years ago, along with its impact on growth and economies. This seesaw has caused apprehension amongst consumers and it will take more than whats been offered by the current government - in fact they are now in a pickle caused by the success of their attack on the previous government over inflation and economic growth, they scared the public into stopping spendingAgree (0) Alert moderator
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cupofcoffee:
03 Dec 2008 2:01:04pm
Due diligence of Howard and Costello? Surely you jest.
It was Paul Keating who put the regulation in place for the banking sector......the man everybody loved to hate....and its thanks to him that our banks are in the shape they are today.
As for Howard and Costello, they sat on huge surpluses so they could throw it around like mad men at election time, but did absolutely nothing else to lift the economy. If it wasn't for the mining sector we would have been a whole lot worse off.
At least get your facts straight.Agree (0) Alert moderator
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drew:
03 Dec 2008 3:23:19pm
exactly. also, who floated the aussie dollar. why do you think we have a lot of protection when there are international downturns...
who reformed industrial relations away from centralised wage fixation - lets not forget the biggest wages blow out was caused under howard as tresurer.
and lets not forget the introduction of super. and decreasing tarrifs.
keating/hawke ALP broke the back of inflation - they did the economic hard yards - and left the economy in great shape.
why do you think interest rates were brought down from near the 20% mark under howard in the early 1980's to 6% by december 1996 (shortly after keating was voted out).Agree (0) Alert moderator
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Amen:
03 Dec 2008 2:30:45pm
You make a strong argument that there should have been no tax cuts and even higher interest rates; that would have killed the economy years ago.
Agree (0) Alert moderator
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Muzz:
03 Dec 2008 1:30:38pm
This is a debt driven crisis. Encouraging more debt and raising hopes of yet more housing speculation seems risky to me?
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Leon:
03 Dec 2008 12:51:41pm
Housing is showing signs of awakening from it's slumber. We have had until recently one of the worst levels of home affordability in the world but the series of large interest rate cuts (including another 1% rate drop just yesterday) has now changed that. I personally know of several people who are at this moment entering the housing market for the first time.
Agree (0) Alert moderator
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John:
03 Dec 2008 1:38:53pm
Then they are idiots, house prices are inflated. The economic stimlus with the first owners grant has only made things worst. In the financial review yesterday it was predicted that Australia is at risk of a housing crash. It said that although there are differences with the U.S market, their are however striking similarities with the U.K Market.
It pointed out, that if unemployment increases and we are now seeing this in the Manufacturing, Finance and mining industry, this would be sufficient to force people to sell. Once this happens, house prices will fall every where.
It went onto say that people who take advantage of the first home grant could down with the fall of house prices.
Why do you think the RBA is cutting interest rates so dramitically(3% in the last few months), they are panicking over this happening.Agree (0) Alert moderator
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Guy:
03 Dec 2008 2:05:39pm
I think it's fair to say that the financial review article also stated that demand and supply conditions are much different in the Australian housing market and lending practices are much more robust.
It'll be flat for 3 years followed by steady growth, take long term view in this one. Values may drop in the short term 10-15%, but again many regions in Australia are still increasing.
Those that have leveraged to the hilt or lose employment may need to sell quickly hence falling AVERAGE prices. But as with everything the economy will grow and boom again and housing and shares and everything else will as well.Agree (0) Alert moderator
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Amen:
03 Dec 2008 12:56:33pm
And so it is... raw materials, jobs, new fixtures and fittings, jobs, infrastructure, jobs so yes it can be the saviour.
The bankers went to lunch, lost all their money and now will not finance a half decent home loan, so... no housing industry no jobs, no jobs no spending ... big recession.
The banking package did absolutely nothing to help the mortgage industry, it is and always was a farce.
The government managed to give all of the money to the banks and almost none came through to the MBS industry; its all locked up now, the bankers have the money and have become so risk averse that even a good borrower has trouble financing a loan.Agree (0) Alert moderator
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Jane:
03 Dec 2008 12:59:03pm
The 'lowest for just 7 years' !! WOW Soooooo, a period of time during the Coalition's term was just as bad?.
Funny how we, as collective Australians, weren't as aware of the situation back THEN as we are of this one NOW. Didn't Rudd describe this as the 'worst in our lifetimes?...insulting all those who endured the great depression.
Most Australians were blissfully unaware back in 2001....and we just hummed along.
We skirted major global downturns like the Asian meltdown and the 9/11 downturn without too much damage because the Coalition didn't over-react, panic and scaremonger the populace. They didn't shove down people's throats the 'scary/ugly/tough' condition of the economy in order to make big fellows of themselves in order to be seen as addressing it as KRuddco have....killing business and consumer confidence in the process.
They didn't scaremonger with bogus petrol price driven 'inflation genies' and 'stop spending' pleas..talking down the economy and making the situation far worse than it SHOULD have been...effectively snuffing the beast before it hit.
Now they're throwing billions at us to correct the mistakes THEY made in their first 6 months....to revive what they killed.
No-one blames them for the financial global crisis.....but for their response to it. The crisis was not unexpected...no surprise....Costello warned of it on the horizon early last year.
This was indeed no time to elect hopeless, knee-jerking, inexperienced 'L' platers.Agree (4) Alert moderator
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Remark:
03 Dec 2008 1:06:39pm
"Most Australians were blissfully unaware back in 2001....and we just hummed along."
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Due to the reforms of the Hawke-Keating era that streamlined and modernised the economy after the neglect of Fraser/Howard and previous Liberal governments.
In addition the Liberals ran a budget deficit in 2001-2002.
http://www.theage.com.au/articles/2002/09/30/1033283437314.htmlAgree (0) Alert moderator
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Jane:
03 Dec 2008 1:34:46pm
'In addition the Liberals ran a budget deficit in 2001-2002.'
I think it's acknowledged the deficit existed then ..d'oh....so what is your point?
The $1.2b deficit then in response to an 'extraordinary year' is hardly comparable to this mounting pressure..... they were also still paying off Labor's $96billion with $8b interest accruing each year and had inherited a $9billion black hole from them. We came out of it relatively unscathed though didn't we?...no drastic action needed....they didn't scaremonger and amplify it to the populace making it worse though did they?
How do you think we skirted the Asian and 9/11 meltdowns?...Luck?
Wake upAgree (0) Alert moderator
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Remark:
03 Dec 2008 1:46:20pm
Wake up, you say? Go back to sleep.
The situation in 2001 was very mild indeed compared to what confronts the world now.
Yet the Liberals are making a big song-and-dance about deficits, when they ran in deficit themselves during the relatively benign time of 2001-2002.
Talk about dumb politics!
Practically every government in the world is, or is expected to, run in deficit at this extraordinary time.
It's their duty-of-care to stimulate their national economies.
PS: You mentioned Labor's debt (yawn). The government debt left behind by Treasurer Howard in 1983 was a greater percentage of GDP than that left by Hawke-Keating.
You also mentioned "L-platers running the economy". More Liberal spin. What was Costello's economic experience before Treasurer? Zilch. Howard's experience? As Treasurer he'd presided over the worst recession since the Great Depression.Agree (0) Alert moderator
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wmc:
03 Dec 2008 1:37:55pm
Howard-Costello continued the reforms of Hawke-Keating but the then Labor opposition spent 10 years disowning Keating and blocking further reform. The current incarnation of federal Labor can take no credit for reform during the Howard years. The Coalition, however, supported economic reform during the Hawke years in particular.
Agree (0) Alert moderator
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Remark:
03 Dec 2008 2:04:55pm
You can talk about who said what about who was doing what. But the runs are undisuputably on the board. Hawke-Keating Labor was perhaps the greatest reforming government in Australia's history.
Howard had his chance at reform as Treasurer, but failed to deliver, as noted in recent years by Costello. Instead he took inflation, interest rates and unemployment all to double-digits, the only Treasurer in history to do so.
His major reform as PM (we will never forget) was SerfChoices, a blatant attack on the pay, conditions and job security of employees.Agree (0) Alert moderator
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James:
03 Dec 2008 2:56:28pm
Inflation was not over 10% at any point in the past 10 years. It bothers me that you politically alligned people just type drivel as if it were fact without looking up the ABS or RBA websites.
Agree (0) Alert moderator
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Heath:
03 Dec 2008 2:15:00pm
The GST is the sole example of reform in the Howard years.
GST=regressive tax on ALL spending regardless of income, and remember it is after all just another TAX.
Keating deserves credit not only for the decade of hard work he put in transforming the australian economy in the 80s, fixing stagflation and the economic barbarism of the preceeding governments, but also for handing Howard on a silver platter, the greatest set of economic conditions a new Prime Minister has ever seen. When time came for Howard to pass on the Prime Ministerial ball it had become a nightmare not seen since he had his grubby hands on the treasureship in the 1970/80s. Everything that man touched imploded. Keating on the other hand was our greatest Prime Minister ever.Agree (0) Alert moderator
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James:
03 Dec 2008 2:57:19pm
I can remember after Hueson went down over Fight Back!, that Keeting wanted to implement a consumption tax, a.k.a. a GST.
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Leon:
03 Dec 2008 1:14:28pm
Mr Costello's tsunami warning was actually about economic problems caused by the floating of the Chinese currency.
http://www.brisbanetimes.com.au/news/national/treasurer-warns-of-economic-tsunami/2007/10/25/1192941275249.htmlAgree (0) Alert moderator
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Glasswalker:
03 Dec 2008 2:12:16pm
And what's your point?
Sure, Costello got the source of the problem wrong, but he knew it was coming. Says more for Costello than the Idiots trying to look after the ecconomy now... Swan has mentioned the R word several times recently, it's starting to sound a lot like he's getting ready to quote Keating's "this is the recession Australia had to have."
Won't be long before Gillard is slipping the Knife into Rudds back over the ecconomy... Any excuse to become Australia's first Female PM... and with her junior membership of the australian comunist party (look it up, it's fact) where will she take us?? Freedoms for the public are already slowly being legislatively stripped with things like the compulsory Broad Band filter, education reforms that the teachers aren't allowed to see until the bill is passed...
Hold on Australia, I sense rough seas ahead...Agree (0) Alert moderator
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spin sick:
03 Dec 2008 3:19:51pm
Where is the inflation bogey now????? The fact is that Swan was a third rate academic with L-plates on. The stock market knew what was coming - it had already dropped 10% in the period from the election to budget night. I was warning some young family members last Christmas of the impending recession (and I am not an economist) - I was not alone, many business people knew what was coming.
BUT somehow Swan, Stevens and Henry did not they were still applying the brakes - WHY?????. I can only assume that they live in the world of lagging indicators and not out talking to real business people at the pointy end OR Swan had a policital agenda to cruel the programs in place by Howard, but didn't have a $96 billion hole to justify it so invented the "inflation bogey"Agree (0) Alert moderator
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Leon:
03 Dec 2008 12:14:38pm
So, almost exactly as forecast and lightyears ahead of most of the other developed economies worldwide. No wonder all those ex-pats are flocking back home!
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chalkie:
03 Dec 2008 12:46:19pm
of course, a per capita growth rate puts Aust in effective recession: .1% - 1.7% population growth rate means a real 1.6% contraction in the economy.
It isn't the size of the pie so much as the size of the pieces for each of us, in a seasona;;y adjusted averaged kind of way.Agree (0) Alert moderator
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Heath:
03 Dec 2008 1:02:18pm
Isnt your economic proclamation based fo the laughable predication that the 'pie' is divided equally amongst all of us.
If the economy was a pie, what slice would profit take? and what share would new immigrants take? not a very accurate analogy.Agree (0) Alert moderator
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James A:
03 Dec 2008 12:14:42pm
Its going to get worse. According to Bloomberg China's economy is tanking and its property market is in freefall.
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Leon:
03 Dec 2008 12:36:17pm
From the article:
"It's really been the impact of very high interest rates in the second half of last year and the first half of this year that's been the major drag on consumer spending,"
So the major domestic problem has now been resolved. It's all up for the economy from here on.Agree (0) Alert moderator
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quadfan:
03 Dec 2008 12:17:11pm
Where there is postive growth., there's hope
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Impromptu:
03 Dec 2008 12:21:38pm
Thank you RBA board.
It's a pity we can't know who were the board dissenters to too many interest rate rises.
The others, of course, thought that higher interest rates would bring down weather affected fruit prices, higher oil prices and, wait for it, higher finance and rental costs.
Well done - brilliant workAgree (0) Alert moderator
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FraserBoy:
03 Dec 2008 12:40:12pm
Interest rate rises - what was the associated timeline for the unravelling of sub-primes in the US?
Was this in the RBAs crystal ball?
Perhaps not. Perhaps they were dealing with the tangible domestic issues of that moment.Agree (0) Alert moderator
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twobob:
03 Dec 2008 1:10:41pm
Yes tangible domestic issues of that moment like; weather affected fruit prices, higher oil prices and, wait for it, higher finance and rental costs.
How on earth do you think Australian interest rates are connected to the unraveling of sub-primes in the US?
It s pretty obvious the RBA had no idea what was driving our inflation. An obvious example of that is the fact that inflationary pressure has dropped at the same time that interest rates have dropped. That because petrol prices have dropped. So the question that must be answered by the RBA board is how did they think increasing interest rates in Australia was ever going to reduce world oil prices? The RBA should be replaced with people like Impromptu because he obviously has a better understanding
of market drivers than do the overpaid clowns in the RBA.Agree (0) Alert moderator
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Guy:
03 Dec 2008 1:57:29pm
Twobob
how the RBA got it so wrong is beyond me as well. The inflationary pressures in the economy were clear - petrol and food, whacking Joe Blow in the back pocket via his mortgage was never going to work. In fact it was sending people to the wall.
I think it will cause a re-think on how to slow inflation in the future. For example why not simply lift GST, then each individual can make their own spending decisions on consumer goods.
Perhaps even hit the Gen-Ys still living with their parents who have large disposal incomes as a result, now thatd be popular!Agree (0) Alert moderator
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FraserBoy:
03 Dec 2008 2:07:25pm
"An obvious example of that is the fact that inflationary pressure has dropped at the same time that interest rates have dropped."
Is that an obvious sign the RBA has no idea what's driving inflation?
Interest rates have dropped because consumer confidence has gone through the floor from the global credit crunch and if people don't spend money, people don't earn it. It's an RBA pump prime. That's one of the sub-prime connections.
The RBA has been openly stating for years that it is extremely aware and concerned of the high level of personal debt of Australians. One factor is that we-ve generally been too easily accessing all of this credit from the banks that a lot of people are ill placed to repay whenever the economy starts to go south.
Weather affected fruit prices are short term. Oil prices have proven to ebb and flow - as we see now. Continued access to credit above and beyond peoples means continued to go on and on and on.
So twobob, how do you manage inflation over the longer term when faced with seasonal price increases and decreases - against debit fuelled spending?Agree (0) Alert moderator
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granny:
03 Dec 2008 12:21:53pm
The next big shock wave to hit will be when everyone who has used their credit card over christmas gets their bill in January. Getting kids back to school, holiday spending on money that you don't have.
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Jizzer:
03 Dec 2008 12:22:55pm
I predict that we're about to see a lot of comments from labour people blaming the liberals, and a lot of comments from liberal people blaming labour.
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John D:
03 Dec 2008 12:28:55pm
I totally agree Jizzer.
I reckon if they want to claim interest rates are dropping because of Labor, they will also have to take the blame for a slowing ecomonyAgree (0) Alert moderator
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Baz:
03 Dec 2008 12:42:47pm
Yes - seems to be a lack of Labor supporters claiming credit for this.
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mick:
03 Dec 2008 1:13:18pm
downward pressure... Labor promised it to help with rising interest rates, fuel pricing through the roof... keeping promises if you ask me, lower interest rate, petrol now 99c a litre, housing prices dropping so the average joe can now get into the market... soon food prices should drop with the lower fuel pricing, after all that is why they were going up, not because of drought, but in transport costs, ie; diesel for trucks to cart your goods to the local woolworths...
Labor keeping promises, Liberals still a bunch of spin merchantsAgree (0) Alert moderator
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Amen:
03 Dec 2008 1:48:55pm
So Mick, I guess to be consistent you will also need to accept responsibility for the slowing economy; everything that you cite as being good is actually the result of things being bad.
Low demand forces lower prices; lower interest rates encourage spending which of course will maintain current prices.
Two bob each way... which way do you want to go?Agree (0) Alert moderator
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mick:
03 Dec 2008 2:24:25pm
downward pressure is all i was saying, which is what Rudd has promised, you take the good with the bad
people want one thing and then want the exact opposite at the same time, it's not possible to please everyone, atleast they (Labor) are doing something rather than denying something is wrong (Liberal) and continuing down the wrong path with their heads in the sand
Good On Ya Kev!Agree (0) Alert moderator
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meh:
03 Dec 2008 2:59:11pm
Why have'nt food prices come down yet, its been 5 month since fuel prices started coming down? So much for grocery watch!
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mick:
03 Dec 2008 3:24:24pm
it will trickle down, and fuel prices have only started to drop over the last few weeks since those independents joined forces in sydney and melbourne and were selling fuel for 99c a litre, not 5 months ago as you suggest... 5 months ago it was still around the $1.60 per litre
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Remark:
03 Dec 2008 12:45:12pm
The Liberals were the ones who politicised interest rates. We recall their promise (non-core promise) to keep rates "at record lows." that duped many people in the 2004 election.
We all know what happened after that "promise": a dozen rate rises in a row, taking rates to the second-highest in the developed world.Agree (0) Alert moderator
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Greg:
03 Dec 2008 12:34:51pm
Labor takes credit for lower interest rates, low inflation.
Labor does not take credit for collapsing job market, low economic growth, stagnant wages, superannuation decline etc.
Notice a pattern.Agree (0) Alert moderator
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Leon:
03 Dec 2008 1:01:24pm
I notice a pattern of who supports which party and how they seem determined to use the internet to talk down confidence in the economy.
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twobob:
03 Dec 2008 1:22:50pm
When and where did labor take credit for lower interest rates?
Your a bit confused mate. It was the liberal (with the truth) politician who lied when he said that interest rates could be controlled by politicians and kept at record lows.
In case you havent noticed there is a world problem happening out there. Dont ya think that it might be havin a little bit to do with whats goin on? Or maybe you think the Australian Labor party is so all powerful and important that the world goes straight into recession the moment that they are elected into power?
What do ya recon it is really?Agree (0) Alert moderator
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Jenny:
03 Dec 2008 12:53:05pm
Well, at least that contradicts the liberal claim that labour government always create high interest rate..
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Amen:
03 Dec 2008 1:00:12pm
Just wait Jenny, just wait. The ALP have only had twelve months and this situation which as I am sure you will agree is none of their making so they cannot claim any credit for reducing interest rates.
Over the next two years as things normalise watch the ALP bring the budget back into surplus, you will need rose coloured glasses to see that happen!Agree (0) Alert moderator
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Greg:
03 Dec 2008 1:12:36pm
If Labor is responsible for lower interest rates.
Then Labor should also be responsible for the collapsing job market.
See it works both ways.Agree (0) Alert moderator
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wmc:
03 Dec 2008 1:41:42pm
To Gillard's credit, she is taking credit for the collapsing job market.
The explanatory memorandum to her IR bill recognises that it "may reduce the incentive of businesses to employ workers" and may increase the incentive for medium to small businesses to employ "more staff on a contract basis".
Why would a political party introduce legislation that reduces the incentive to employ people and increase the casualisation of the workforce?Agree (0) Alert moderator
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Glasswalker:
03 Dec 2008 2:44:12pm
Funny that... Casualisation of the employment sector... Isn't that what Labor was saying was one of the BIG problems under WorkChoices???
So we have an incoming IR reform that, while being fairer to the working class, will reduce their chance of actually gaining that fair employment!!!
Starting to make WorkChoices look like it wasn't so bad after all...Agree (0) Alert moderator
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Jenny:
03 Dec 2008 3:16:44pm
Well, I guess if labor is responsible for collapsing job market in Australia, then they would be responsible for the job market of the EU and US as well.
Just to show most of the time the government of the day do not really know what they are doing. Just depend on which way the wind blow. That goes with the opposition also.Agree (0) Alert moderator
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Ishmael:
03 Dec 2008 12:24:21pm
It is highly interesting to speculate upon what would be the result were media to confine its reporting of the ecomonmic situation to the bare facts, for example "Grim forecasts for borrowers" "Bleak economic horizons presage desperate measures" "unemployment to soar". Now to a greater or probably much lesser degree these things could all come to pass, yet such doom and gloom does absolutely nothing to help the current situation and at worst can become self fulfilling phropesies. Confidence is the key, recession/depression are all situations brought about by a lack of confidence - extreme in some cases. Since we are dealing here with perceptions rather than fact, surely it behoves all concerned to put a positive spin on the situation (short of sticking heads in the sand) and that way the problems should largely resolve themselves. Again I repeat, this whole mess is brought about by PERCEPTIONS (in Australia at least), aleter these for the positive and...what problem?
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cu:
03 Dec 2008 12:39:38pm
Firstly, I dont blame the global economic problems on our govt.!
I can only compare to last year. The economy was doing fine.
The MOST important difference would have been, John Howard would not have paniced. It would have been steady as you go which would have led to more consumer confidance. He wouldnt have spoken of 'threats to National Security'. He wouldnt have chopped and changed his mind with a big frown on his face or looked nervous like the current treasurer.
He wouldnt have spoken of bank guarantees except if he had thought it out first.
We have seen many blunders this year from the current govt. and all they have done is blame the opposition.Agree (0) Alert moderator
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peter69:
03 Dec 2008 1:07:06pm
cu
John Howard did panic and tried to buy votes. This pushed up inflation creating higher interest rates which was his final nail.
Admittedly Swan has not been the greatest salesman but the policy has been advice from treasury, and that advice would most likely be the same that the Liberals would have received. Hence the same policy.
Its just a political game. As far as the basics go, the 2 parties have been close to the same since Hawke era. The difference is what they stand for in society. ie: There Moral and Ethical Integrity. If you are very conservative vote Liberal, If you are between progress and conservative on a social lever vote Labor.Agree (0) Alert moderator
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Patrick O'Reilly:
03 Dec 2008 1:15:37pm
But Cu. According to Comrade Swan the inlfation "genie" was out of the bottle. It didn't matter that the worst credit crisis in 80 years was unravelling the engine of the world economy and driving the worlds largest economy into recession. They had to conduct a "war" on inflation. Now their conducting a "war" on unemployment. Next week they'll be conducting a "meaningless discriptive word to instill fear and get headlines" on something else. You'll never hear the words "financial crisis" uttered by Swan or Rudd. It is always "Global Financial Crisis". Whilst it is undeniable their is a crisis in th Global economy the only reason they always prefix finacial crisis with the word "Global" is to absolve themselves of any responseability for what takes place in the Australian economy. They obviuosly know 2009 is going to be very, very rocky in this country and could potentially damage them politically as no matter how many times they say "global" the average Joe when he heads to the polls wants the Australian economy to be prospering and wants his/her job to be safe.
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twobob:
03 Dec 2008 1:39:27pm
O'really patrick?
I am absolutely positively defiantly certain that interest rates are controlled by a non government body. Its called the RBA. They are the ones who were raising interest rates to deal with inflation. But I know what happened to you. Some one told you a big fib about how they could control interest rates. I sorry to tell you mate but its just not true. They are sort of dependant upon what happens in the rest of the world. Go and have a look at what they were else where under keating or howard. You will see that the Australian economy doesnt set these things the world does. And the world is in recession now (its havin a bit of an impact on us too).Agree (0) Alert moderator
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Patrick O'Reilly:
03 Dec 2008 2:22:36pm
I work for the QLD Treasury, two bob. I don't need anyone to explain the functioning of monetary policy to me. The fact remains Wayne Swan early this year was talking down the economy, talking up the neccessity to raise rates and repeatedly used the descriptive term "infaltion genie is out of the bottle". He was doing exactly the opposite of what he should have been doing. Both Swan and Glenn Stephens greatly underestimated the severity of the credit crisis in the US and have as a result of thier incompentance put Australia on the brink of an unneccessary recession.
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doleur:
03 Dec 2008 12:27:03pm
'Bill Evans says flagging consumer spending has been the biggest detractor from economic growth'
Not our fault, mate, we're broke. And that's all because of your bank's investment arm. They promised consistently high performance in a moderate investment account and delivered BELOW an ordinary cash deposit level. We also miss out on Rudd's generous granny bonus for Xmas.
So it'll be more Pal for us while you sup on caviar.Agree (0) Alert moderator
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John O:
03 Dec 2008 12:27:54pm
Prediction - same or lower figure for this quarter buoyed slightly by Christmas buying fueled by the Government hand out. Technical recession by September.
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Leon:
03 Dec 2008 12:46:42pm
Are your economic credentials better than those of the OECD?
They have stated Australia is not heading for recession.Agree (0) Alert moderator
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John D:
03 Dec 2008 12:52:55pm
I think the OECD forgot we now have a Labor government. So I think John O comments are spot on
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Amen:
03 Dec 2008 2:11:10pm
The report which you are citing was prepared months ago... just a thought but things might have changed just a little since their data?
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Glasswalker:
03 Dec 2008 3:24:18pm
Funny that... Swan keeps saying recession IS a distinct possibility... so if you are saying that the OECD economics (prepared months ago) are the ones that show any credibility, by your own argument, Swan's economics have 0 credibility... a fact most of us are accutely aware of.
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riprocker:
03 Dec 2008 12:53:18pm
No need to worry that Uncle Kevin, Uncle Wayne and Aunty Julia have up-ended the lolly jar. We can get plenty more on tick. All we need to do is be mindful is that the dentist bill needs to be paid in cold hard currency.
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sojourner:
03 Dec 2008 12:54:15pm
My Prediction.
This quarter is +0.1%
Dec quarter -0.3% (cause its seasonally adjusted)
March quarter +0.2%
June quarter +0.4% (pick up - lag effects)
In honour of Gifffens Paradox of Thrift lets open a book and put a $1.00 down.
Who's next?Agree (0) Alert moderator
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Greg:
03 Dec 2008 12:28:11pm
The fact is the Rudd Labor govt budget was a terrible one which caused the economy to slow down before the full effect of the financial crisis set in.
Remember Rudd during his first budget proudly claimed it would bring down inflation and lower the growth, he had no idea of how big the financial crisis was . He was clueless on global macroeconomic trends.
Australians are doing it tough thanks to the usual Labor incompetence.Agree (0) Alert moderator
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Heath:
03 Dec 2008 12:56:51pm
With the news that the United States has been in recession since december 2007, its pretty remarkable that you have the ignorance to continue with the ridiculous line that the whole mess is the fault of the ALP. The budget in may was heralded by economists as prudent economic management and a welcome counterbalance to the fist-full-of-dollars economic approach by Howard/Costello in the preceeding years.
The RBA just lowered interest rates by a further 1% which has put absolute lie to the Liberal notion that their policies create interest rates lower than Labor.
Read the article again. It says low growth is being caused by low consumer spending, which resulted from high interest rates in the preceeding year, which was the result of the Liberals incompetent economic policy of high inflationary spending.
Keating handed Howard a dream of an economy in full throttle in 1996 and Howard gave Rudd a timebomb in 2007.
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