Mike's Minute: GDP figures show how much trouble we're in

Author
Mike Hosking,
Publish Date
Fri, 19 Mar 2021, 9:23AM

Mike's Minute: GDP figures show how much trouble we're in

Author
Mike Hosking,
Publish Date
Fri, 19 Mar 2021, 9:23AM

Well, if you thought there might be a bit of doubt around the bubble, that got put to bed with the GDP figure.

This government responds to pressure. And the pressure now has become embarrassing. It's come from Scott Morrison, to the airports, to business, to National and their petition,  all of whom are either perplexed or over waiting for this thing to be real.

This government also hates bad press. A GDP at minus 1 percent for the December quarter is not only worse than all the forecasters predicted, it's an economic disaster. A bubble is a solid way to get some positive headlines and tackle a seriously damaged economy.

The beauty of the GDP is you can't argue with it. This is government's economic report card. The health side of Covid is, at least, partly emotive. What might have happened, the ICUs that could have been flooded, the deaths that may have unfolded. This is what they have played on, and now sadly for all of us it's coming home to roost in the bottom line.

Australia, dare we compare, for we must, because they are our closest friends, competitors, and allies, got a GDP figure for the same period of plus 3.1 percent. It's a startling and embarrassing gap, actually gulf would be more accurate.

But closing your economy down less, by not letting fear overwhelm you, they struck a better balance. By taking the singular approach ideological approach we did, obsessing about handfuls of cases, we panicked, and this is the price you pay.

Here's what's worse, a lot of us have been saying this for a year. This was entirely predictable, and it never had to be this way or this bad.

The spin you hear from this government about us being the best, wasn’t, and now is proven simply not to be true.

The end of last year, which included Christmas, was bad. And take the first quarter of this year, which we are just concluding, the quarter with the lockdowns in the biggest city. So, as sure as night follows day, this quarter will be as bad, if not worse than the one we've just got.

And that is a recession.

Westpac were forecasting a recession out of quarters one and two this year. We haven't even got to two yet. The hope, the upside, is one can but pray that reality smacks the government in the face, they finally realise the damage they're doing and address it.

The bubble would be a decent first step, cynical political move, or not.