Flailing newsrooms flog fears of a fictional recession

Anxiety over Australia’s economy fomented by craven anti-Labor ‘reporters’ is unfounded, as Alan Austin reveals.

LAST WEDNESDAY’S national accounts showed Australia’s economy to be the strongest since the Coalition was vanquished in 2022. It is now the only advanced nation with economic growth above 2% of gross domestic product (GDP), the jobless and inflation both below 4.6%, and government debt below 20% of GDP.

The quarterly accounts, released last Wednesday by the Australian Bureau of Statistics (ABS), confirm Australia is nowhere near a recession. Unfortunately for the nation’s mental health, most newsrooms continue to falsify the narrative.

Outcomes lifting — quarterly and annual

Quarterly growth in GDP for the March quarter was 0.27%. That’s lower than the previous three quarters, but higher than March last year and the year before.

Of the 37 wealthy OECD members that have reported March numbers, six slipped into the red — France, Sweden, Israel, Mexico, Chile and Lithuania, with Portugal and Luxembourg recording zero growth.

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Ireland continues its lengthy recession. Canada recorded zero growth following a negative December quarter. So times are tough.

Australia’s annual GDP growth was 2.52%, just above the revised figure of 2.51% for December last year. This brought the streak of positive annual quarters to 21, a record only Belgium, France, Switzerland and Turkey have emulated. (And the USA, if we believe their figures, which no one should.)

Australia’s 2.52% ranks a creditable ninth in the OECD, well up from 31st in 2022 under the hapless Coalition. The OECD average is a dismal 1.64%, due to destructive tariffs, trade wars and military conflicts brought on by the corrupt and incompetent Trump regime in the USA.

Australia copped additional local setbacks, as ABS head of national accounts Grace Kim explained, including “cyclone disruptions to mining and export activities”.

Significantly, Ms Kim said, most growth derived from private business with machinery investment recording “the largest rise in 30 years”.

Australia’s real net national disposable income per person increased to $19,377 in March. While superficially welcome, this remains ambiguous, as this should decline when incomes shift from the top 20% to the bottom 80%, as is clearly happening.

Gross disposable income hit a record $456.3 billion, a 5% lift over March last year and up a thumping 20.6% on March 2023.

Total national factor income reached a record $665 billion, up 5.1% on one year ago. The share of that income going to employees is now 54.2%, the highest since 2016. The share going to corporate profits is down to 26.9%, the lowest since 2018. See chart below.

Corporate profitability continues to rise, with profits ex-mining hitting a new record in March of $84.6 billion.

Indicators of all-time high living standards are still surging. These include health outcomes, life expectancy, percentage of students enrolled in private schools, overseas trips per population, sales of new cars and light aircraft, spending on dining out and other luxuries relative to GDP and fewer seniors forced to work.

Worsening media mendacity

As shown here previously, the stronger Australia’s economy, the shoddier the reporting.

In other countries, newsrooms would congratulate corporate bosses for their enterprise, unions for their cooperation, consumers for their confidence, themselves for timely reporting and perhaps offer a nod to the government for its oversight.

But in Australia, with last week’s data confirming arguably the world’s best-performing economy, the shonks and charlatans delivered these banners:

‘Going to be a long winter: Top economist delivers recession warning’ (Sky News);
‘Jim Chalmers hails Australia's failing economy as a success story in latest episode of delusional spin’ (Daily Mail Australia);
‘Australia’s economy slows as cost of living and high oil prices hit growth’ (The Australian);
‘Recession, this way comes’ (Spectator Australia);
‘Why Alan Kohler is worried about a recession’ (ABC News);
‘Top economists warn Australia is at risk of stagflation’ (Nine News); and
‘For the first time in more than three decades, Australia faces the possibility of a recession’ (Daily Mail Australia).

Nonsensical predictions of a dire recession

Let’s review the last of that tawdry collection, above, from a popular Daily Mail podcast. The presenter, Peter Van Onselen, wants us to be afraid — very afraid. We can tell from the underlay of menacing music from Mount Doom.

Van Onselen starts:

“It’s hard to overstate the pain Australians felt when the 1990 recession hit. Mortgage rates were at 17%. The unemployment rate shot up to over 11%. Youth unemployment, if you can believe it, was at 30%...”

So what? Today’s numbers are nowhere near those.

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Van Onselen continued:

“Yet here we are, Australia today, potentially on the cusp of a 1990s-style recession. That’s not a rhetorical flourish from me. That’s what the Reserve Bank is warning, is the risk to the economy right now. This is the governor of the RBA, Sarah Hunter, when being quizzed about where the economy was at, gave the stark warning that if we’re not careful, and if the right steps aren’t taken to rein inflation in, her warning is that a re-run of the 1990s style recession may well be on the cards. That is a living nightmare for some ...”

Of course, Sarah Hunter issued no such warning. Not anywhere. Not ever. In fact, she said the direct opposite. Independent Australia checked with the RBA.

Its emailed response highlighted Dr Hunter specifically rejecting a recession:

‘Our baseline forecast doesn’t have that outcome built into it and it wasn’t an outcome that we saw in the two alternative scenarios that we presented in the Statement on Monetary Policy...’

So, no, the Daily Mail’s dire warning of a recession – with double-digit mortgage and jobless rates – was not a rhetorical flourish. It was a crude political attack based on zero evidence disguised as economic analysis.

Sadly, this is what passes for “journalism” today.

Alan Austin is an Independent Australia columnist and freelance journalist. You can follow him on Twitter @alanaustin001 and Bluesky @alanaustin.bsky.social.