Resilience extends recession-free run

Scott Morrison says it is a tremendous achievement a generation of Australians has grown up not knowing a recession, but what matters is where the economy goes from here.

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The treasurer says the latest national accounts show the resilience of the economy, with growth expanding by 0.3 per cent in the first three months of the year, defying expectations of some economists of a negative result.

However, the slim rise has dragged the annual rate down to 1.7 per cent from 2.4 per cent and well below the three per cent rate which is normally associated with strong employment growth.

“The results today demonstrate the continued resilience of the Australian economy,” Mr Morrison said in Canberra on Wednesday.

But shadow treasurer Chris Bowen says the economy is growing at its lowest rate since the 2008-2009 global financial crisis.

“Today’s economic growth figures provide no comfort for a treasurer and government that told us they had a plan for jobs and growth,” Mr Bowen told reporters in Sydney.

He said the treasurer’s new slogan of “better days ahead” rings just as hollow.

Australian Chamber of Commerce and Industry director of economics Adam Carr said the result showed policy makers could not be complacent.

“While some of the softness this quarter is due to one-off effects, it follows surprise weakness in the September quarter as well,” Mr Carr told AAP.

However, the Organisation for Economic Cooperation and Development has given Australia an upbeat appraisal in its latest Economic Outlook.

It expects the economy to grow towards three per cent by the end of next year.

There is some debate among economists as to whether the latest growth result means Australia can now claim the record for longest uninterrupted expansion in modern history, having not suffered a recession since 1991, or is presently neck and neck with the Netherlands.

But according to economists at Commonwealth Bank, the Dutch may have entered a technical recession in 2003 rather than 2008, which would mean Australia surpassed the landmark four years ago.

“For Australians sitting at home, those sorts of things are less important than what is going to happen to growth in the future,” Mr Morrison said.

“A generation of Australians have now grown up without ever knowing there was a recession; I think that is a tremendous national achievement, but it’s not one that can be taken for granted.”

Household consumption, business investment, government spending and a build-up of business inventories all made contributions to growth during the March quarter, while dwelling investment and exports were a drag.

It was the second quarter in a row of business investment growth after 12 consecutive declines that reflected the end of the mining investment boom.

Adverse weather did affect iron ore exports from Western Australia in the March quarter.

Economy’s growth run masks deeper concerns

Australia’s economic growth has slowed to its weakest pace in almost eight years and there are concerns that weak housing investment and consumer spending will prevent a swift improvement.

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Growth of 0.3 per cent in the March quarter took the annual rate of growth to 1.7 per cent, data from the Australian Bureau of Statistics showed on Wednesday, and Australia has now gone 103 quarters, or more than 25 years, without a recession.

The numbers are slightly better than the 0.1 per cent quarterly growth forecast by economists, and the 1.4 per cent predicted for the year to March, and pushed the Australian dollar higher.

They also settled, for now, speculation about the central bank potentially cutting interest rates.

Growth was impacted by bad weather, which restricted commodity shipments and housing construction, and Cyclone Debbie’s impact on exports and construction is likely to carry over into the June quarter.

However economists warn the data points to a broader economic slowdown.

“Some of the main growth drivers of the economy in recent years, including residential dwelling investment and exports, reversed in the March quarter,” St George senior economist Jo Horton said.

“Dwelling investment, which has supported the transition from mining investment-led growth, is close to a peak and its role of support for economic growth is likely to fade later this year.”

There was a 4.4 per cent drop in dwelling construction, a three per cent fall in spending on machinery and equipment and a 2.7 per cent contraction in government spending.

Household consumption grew by 0.5 per cent in the March quarter, down from 0.9 per cent growth in the preceding three months, and exports fell 1.6 per cent in the quarter.

There was a pickup in business investment, indicating the sharp decline in mining investment is almost done.

However, wage growth continued to be anaemic, resulting in households running down their savings. The household savings rate slipped to 4.7 per cent in the quarter, and is now down more than 2 percentage points over the last 12 months.

“The wage, consumption, and household savings dynamics remain worrying. Highly indebted Australian households continue to save less to fund expenditure,” Royal Bank of Canada economist Su-Lin Ong said.

On Tuesday, the Reserve Bank of Australia stuck to its long-term forecasts, saying it expects economic growth to increase gradually to above three per cent over the next couple of years.

Economists said this is likely too optimistic given the slowdown in the economy, coupled with the impact of unemployment and a weak outlook for wages growth.

ANZ senior economist Felicity Emmett said persistently weak wages growth will mean inflation remains under control.

“In our view, this will leave the RBA on hold for the foreseeable future,” she said.

Economy extends recession-free run

AUSTRALIA’S ECONOMIC JOURNEY SINCE LAST RECESSION*

1991 – Paul Keating’s “recession we had to have” ends.

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Reserve Bank cash rate 9.5 per cent.

1992 – Jobless rate hits record 11.2 per cent in December. RBA cash rate 5.75 per cent.

1996 – John Howard’s coalition wins government, appoints Peter Costello as treasurer. Ian Macfarlane becomes Reserve Bank governor.

1997-1999 – Asian financial crisis, Australia avoids recession.

2000 – Economy close to a recession in final two quarters of the year after the introduction of the GST.

2001 – Dot长沙桑拿按摩论坛, bubble bursts. Australia avoids subsequent recession triggered in the US, having been previously ignored by investors as an “old economy” of agriculture and mining rather than making computer chips.

2006 – Glenn Stevens becomes RBA governor.

2007 – Kevin Rudd’s Labor party wins government, appoints Wayne Swan as treasurer.

2008 – Jobless rate falls to four per cent for the first time in February. RBA cash rate seven per cent.

– Growth contracts in the December quarter in initial reaction to the global financial crisis but Australia is one of few countries to avoid the subsequent worldwide recession.

2009 – RBA cash rate cut to three per cent, lowest on record at the time.

2010 – Julia Gillard rolls Rudd for Labor leadership, Swan remains treasurer.

2011 – Economy contracts in March quarter as a result of a series of natural disasters – Cyclone Yasi and the Queensland floods, along with the trade disruption from earthquakes in neighbouring New Zealand and Japan.

2013 – Rudd rolls Gillard, Chris Bowen becomes treasurer for 83 days.

– Tony Abbott’s coalition wins government, appoints Joe Hockey as treasurer.

2015 – Malcolm Turnbull rolls Abbott for prime ministership, Scott Morrison becomes treasurer.

2016 – Negative growth in September quarter due to weather-related disruption and a downturn in confidence after the trifecta of a long Australian election, the Brexit vote and the run-up to the US presidential election.

– RBA cash rate cut to an all-time low of 1.5 per cent in August.

– Philip Lowe becomes RBA governor.

2017 – Economy grows 0.3 per cent in March quarter, keeps record expansion alive.

* A recession is classified as two consecutive quarters of negative growth.

Ramping it up for Ramadan: Meet skateboarder and rapper Amar Hadid

Amar Hadid is not short on drive.

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The 18-year-old was awarded a scholarship for her skateboarding talent, and is in her first year at the University of Sydney, with ambitions to study medicine.

She’s competed in California at an international meet where she finished third in the Vert category and fifth in the Bowl. 

But personal success isn’t the only thing that drives her.

She told SBS World News she wants issues such as child slavery, terrorism and women’s rights to be acted upon by everyone that cares.

“Do something about it, and don’t be silent,” is her advice.

Amar Hadid and her mother Anne HadidSBS

That’s exactly what she did after the 2014 Lindt Cafe siege.

Hadid, who’s of Lebanese heritage, was so disturbed by the events she wrote a rap song expressing her anger that innocent lives had been lost.

“No true Muslim who honestly believes in God and believes in Islam would ever do anything like that,” she said.

The key for Hadid is doing what she loves. She’s already aiming for the Olympics as a skateboarder and points to the power of doing something you’re connected with.

“When you do something you love, you do it well,” she said.

She’s pursuing a Bachelor of Arts in Science and Arabic, with the long-term goal to study medicine.

But right now the prospect of appearing at an Olympics when skateboarding makes its debut in Tokyo is her focus.

“To be standing at the Olympics standing in front of everyone representing my country, to get that feeling, that’s the feeling I want to feel,” she said. 

Hadid has observed Ramadan since the age of six, even though her faith doesn’t require pre-pubescent children to do so.

But she admits it isn’t easy not eating or drinking during daylight hours.

“Of course it’s got it’s challenges and you do get hungry, but it reminds you of what Ramadan is,” she said.

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