The facts are in: We’re not in a recession! Looks like we are the lucky country after all, being one of the few to escape the technical R word.
Apparently our GDP has actually risen by 0.4% in the first quarter of this year, coming off the back of a 0.6% decline in the last quarter of 2008. This bucking the trend showing that the Australian economy is very well placed in the global sense.
But… now lets ask the question - who do we thank?
Kevin Rudd and his multiple stimulus packages…? There’s a very good argument advocating that Kevin’s swift and decisive action by way of cash injections actually did some good, and we probably haven’t seen the full impact of even the initial spending spree as yet - after all $52bn worth of Federal Government money was spent PRIOR to the budget, so lets assume there’s more flow on from that to come, and perhaps even more good news in the short term? Retail sales are high and there is no doubt that $900 here and $1000 there has contributed to the previous record retail growth and overall economic performance.
Then again - if the economy had not been as healthy as it was leading into the GFC, left as a standing legacy from the Howard Government in Dec 2007, where would we be today!? Many measures and government strategies / initiatives put in place by the Howard team have helped secure Australia’s economic stability. Is it the economic inheritance bequeathed to Mr Rudd by John Howard that has allowed him to stimulate as required?
The repayment of all Government Debt gave Kevin and Wayne a blank cheque and a green flag going into an economic firestorm. The creation of the Future Fund and other initiatives allowed a pool of cash to be drawn upon without smashing the budget.
Is it safe to say that without the Coalition’s conservative economic rationalism for 12 years, the spending spree by Kevin 07 could not have taken place… So maybe Howard? Costello?
Perhaps it’s the Reserve Bank for their management of the interest rates?… or the banks for passing it on? Over $1000 per month in savings for some mortgage holders.
When all said and done our much higher than expected trade data; namely the narrowing of our Current Account Deficit by $2bn probably played a big part, even if it was primarily due to significantly reduced imports.
Lets say we look like we’re in pretty good shape moving forward - unemployment, although a rise is inevitable, should be lower than previously expected and perhaps a full recovery is closer than what we thought!
- Nathan Seidl
