Australia's growth rate shock sparks recession talk
IF you haven't had a decent payrise this year, you shouldn't be surprised.
The Australian economy is hardly booming.
In fact it shrank 0.5% in the September quarter, well below forecasts, according to new figures released on Wednesday.
It's the steepest decline since the global financial crisis of 2008.
The annual growth rate came in at a paltry 1.8%.
The figures will put huge pressure on the Turnbull government to deliver some good economic news.
Public capital expenditure, such as infrastructure investment, knocked 0.5 percentage points off growth in the September quarter after a strong June quarter.
The Australian Bureau of Statistics noted that higher-than-usual rainfall contributed to much of the decline in building activity.
Negative qtrs of econ growth since 91:— Wayne Swan (@SwannyQLD) December 7, 2016
2011: Cyclone Yasi & QLD Floods
2016: Scott Morrison & Libs #auspol
The last time Australia had a negative quarter was March 2011, when floods in Queensland knocked out a large part of the nation's coal production, the ABC reported.
While the figures are worrying, they don't mean Australia is in a recession.
That requires two falls in a row.
In Australia that last occurred in the first half of 1991.
Treasurer Scott Morrison has denied Australia is facing a recession but said it reinforced the need for the Australian Parliament to back the government's economic policies.
Mr Morrison also jumped on Adani's $21 billion coal mine plans, saying it was welcome news in light of his concerns about the economy in Queensland and Western Australia because of the mining downturn.
"We welcome the fact that Adani is keen to get on with it,'' he said.
"Imagine if there hadn't been all the carry on and the cheer squads that have been trying to frustrate that project for so long on the basis of ideology, from time to time cheered on by our political opponents, whether it be the Greens or elsewhere.
"We have always been a supporter of that project and are keen to see that go ahead.
"It will be great for central north Queensland as well. We want it see investment and people get jobs.
"People are investing in this economy and it is a good investment. We want to make it even better going forward. To have that, you can't take it for granted. The Labor Party seems to think that the growth will just fall out of the sky.
"Why else would you say you will tax people more, increase the deficit and hope it all turns up right in the end?
"What is their alternative policy for growth? We have one. We want to ensure businesses are in a position to invest more. They want to stop us."
Mr Morrison rejected suggestions Australia was heading for a recession.
" I think the consensus forecasts and the other commentary demonstrates going forward there are a lot of things to be positive about. I am not one to speculate on those matters. We will wait and see the data," he told reporters
"You are being entirely speculative,'' when asked about a recession.
"I won't be unhelpfully speculative on those issues. I will leave that to the economists' dining room. What is important is there are positive signs. Let's not forget, we are growing faster than the US, Canada, Germany, more than six countries,'' Mr Morrison said.
"We are the second after the UK if we're in that group.
"We have a lot of things to be positive about. We are focused on that. We aren't (contemplating) the sort of outcomes that you are referring to hypothetically. You are getting ahead of yourself."