Rugby states forging ahead
The baton of growth in the Australian economy has passed from Western Australia to the rugby states. The only states where total spending grew faster than the population over the past year were Queensland (up 2.5 per cent) and NSW (up 1.6 per cent).
The Bureau of Statistics estimates that Victoria and South Australia are now edging up slightly, but in the June quarter spending in Victoria was up just 0.1per cent over the year, while in SA it was still down 0.7 per cent.
Western Australia is now in recession, on any sensible definition. In the past three quarters its private investment has plummeted by 10 per cent, total spending has fallen 3.8 per cent and in the past year unemployment has climbed from 3.8 to 4.8 per cent.
In Tasmania, there is still no light on the horizon. In trend terms, total demand in the state economy has now shrunk for seven quarters in a row. In two years, unemployment has shot up from 5.2 to 8.4 per cent. One poll last month claimed a 15 per cent swing against Labor, which if true would leave it with just one seat in the state. Meanwhile, the Northern Territory is booming with new mining construction, but the ACT is stalling due to federal spending cuts.
Otherwise Australia's economy divides on rugby/AFL lines. Year on year, spending in the rugby states grew by 2 per cent. Spending in AFL territory slid backwards by 0.8 per cent. Some will blame James Hird for this, others Andrew Demetriou.
In short, the economy is weak, but no weaker than it was three months ago. Australia's world record of 22 years without a recession has been extended. But its economy is growing well below its potential.