Who said the recession we had to have

All the debt-financed business carpetbaggers like Russell Goward, Christopher Skase, Abe Goldberg etc were put out of commission. Australia was as Keating put it "de-spivved". Inflation was exorcised out of the Australian economy. It was a policy-induced recession though it was not meant to be; the econocrats were aiming for a soft landing but it all went terribly wrong.

The double-digit interest rates that were intended to give us that transition went awry, with the economy sent crashing. Keating wanted interest rates brought down far quicker but the Reserve Bank was too cautious. Even now Keating believes he had a greater instinct of where the economy was heading than the people who were advising him.

When asked about it by Kerry O'Brien in the interviews, now published, whether Keating had any remorse about landing the economy into recession, he responds that he will take the blame for it so long as he also gets the credit for the subsequent flowering of the Australian economy where real incomes for middle Australia have grown more than for those in most of our trading partners.

Keating masterminded the recovery using a modest Keynesian stimulus but he was never to really see a full recovery. Unemployment remained stubbornly high at one point hitting Twenty-five years on we are a different country, more trade exposed but more resilient.

It's largely because of the architecture Keating put in place, to wit, the floating dollar, enterprise bargaining, fiscal restraint and an awareness that we were no longer a closed economy and a law unto ourselves.

Of course, a good proportion of the electorate have no knowledge of either the recession or even Keating. They can just vaguely recall John Howard. One would wager that there are very few in the Treasury of the Reserve Bank who can recall the recession. What saved us when the global financial crisis was coming our way was that the Treasury had the personnel to match it.

It was the early s, Bob Hawke was prime minister, Paul Keating treasurer, and Australia was in deep recession. Andrews was just one of the many, suddenly out of work after three decades working in IT. Andrews had never been out of work and the experience changed him. For most of that time he survived on unemployment benefits.

He, too, went on unemployment benefits. Companies cut back apprenticeships and put on fewer trainees. Behind economic data, inflation reports, consumer confidence measures, interest rates, business investment, there are human beings. Last week saw another hint of a stumbling economy — with lacklustre retail spending the weakest since the s recession — and this week saw the jobs rate drop for the first time in three years.

Whether or not a recession is likely, few Australians remember what a recession actually is. Sixty percent of the current workforce was too young to be in work when the last recession hit in , 29 years ago. The conventional definition of recession — two consecutive quarters of negative gross domestic product growth — is often considered inadequate, with high unemployment also critical. But in the September quarter of , there had been a 1. The formal recession continued until the September quarter of , although unemployment remained stubbornly high for several years.

The causes of that recession, which were global — and whether the Australian government could have made it less severe — are debated still. But recessions are awful. Jobs are lost and relationships fray. Thirty-one out of 38 studies on the impact of recessions found that suicide rates increase during downturns. Save Log in or Subscribe to save article. Recession we had to have. The biggest stories in business, markets and politics and why they matter.

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