‘The economy is coming back’: Frydenberg

By Cameron Micallef

December 03 2020
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Treasurer Josh Frydenberg has told reporters that the latest national account figures should give Australians “optimism and hope” as Australia has emerged from its first recession in nearly three decades.

The Australian Bureau of Statistics confirmed on Wednesday, 2 December, that Australia has emerged from a recession, with the biggest quarterly expansion since 1976.

Household spending was the main contributor to a rise in economic activity, with the ABS reporting a 7.9 per cent increase in spending on both goods and services.

Spending on services rose 9.8 per cent, driven by spending on hotels, cafes and restaurants, health and recreation, and culture as containment measures were relaxed.

Commenting on the figures, Mr Frydenberg said “the Australian economy is coming back”.

“Facing a once-in-a-century pandemic that has caused the greatest economic shock since the Great Depression, Australia has performed better on the health and economic fronts than nearly any other country in the world.”

Mr Frydenberg pointed to other positive economic data – including rising house prices and building approvals, as well as strong jobs growth – as evidence that the recovery was well underway, while acknowledging that the recession had caused significant damage to many households.

“There are a lot of Australian families that will be in a pretty tough financial situation and a number of Australians are still out of work.”

“Technically, Australia’s recession may be over, but Australia’s economic recovery is not.”

“There is a lot of ground to make up and many Australian households and many Australian businesses are doing it tough – very tough,” the Treasurer said.

He also noted the importance of maintaining the health crisis, with Victoria being the only state or territory not to experience economic growth for the quarter due to a second lockdown.

“Victoria – a quarter of the national economy – has only just begun its recovery after the devastating second wave,” Mr Frydenberg said.

“In these national accounts, every state and territory saw strong growth in the quarter except for Victoria, where it contracted.

“If Victoria had grown in line with the rest of the nation, national growth in the September quarter would have been 5 per cent – not 3.3 per cent.”

The Treasurer noted that since the health pandemic started, the goal has been to keep Australians in work.

“Over the last five months, 650,000 jobs have been created, the effective unemployment has come down from a peak of 14.9 per cent to 7.4 per cent.

“Participation rate is at 65.8 per cent, approaching its pre-crisis level, and the Reserve Bank has said the JobKeeper program has saved at least 700,000 jobs.”

However, shadow treasurer Jim Chalmers used the job figures to attack the Morrison government, stating September growth is little comfort to the 1 million Australians who are currently out of a job.

“For many Australians, what looks like a recovery on paper will still feel like a recession,” he said.

“What really matters is not one quarterly GDP number on a page, but how Australians are actually faring and whether they can provide for their loved ones.”

“The Morrison government fails to understand that 2.4 million Australians are still unemployed or underemployed, and many small businesses are under enormous pressure.”

“Today’s data shows there is a long way to go to undo the damage of the recession, with the crisis exacerbating longstanding weaknesses in the economy,” Mr Chalmers concluded.

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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