Australia could be headed for a recession

There’s a bit of pressure on the Turnbull Government to get the budget back to surplus in the next three
Politics

There’s a bit of pressure on the Turnbull Government to get the budget back to surplus in the next three years, after it was revealed the country could lose its Triple A credit rating, yet finance minister Mathias Cormann doesn’t want to commit to a final deadline for when it might happen.

“We need to make decisions that are both fiscally and economically responsible,” the minister told Sky News on December 11.

Although the mid-year budget review won’t get handed down until December 19, figures released recently showed the country’s economy had contracted for the first time since March 2011, by 0.5 per cent. However, Cormann denies any indication Australia is headed for a recession.

“I completely reject your proposition that we are in a recession right now, that is just false,” he told Sky News.

He also ruled out the Government undertaking any stimulus spending to boost the economy.

“We don’t believe it is sensible to pursue so-called stimulus spending,” he said, reflecting on the Rudd Government’s decision to do so in 2007-08.

“Labor pushed that sort of approach when they were in government and it clearly caused damage to the Australian economy…”

Cormann says the Government has demonstrated discipline to ensure that Australia does not “go backwards” as a result of the policy decisions it is making.

How important do you think a budget surplus is to the Australian economy? What economic issues do you think the Government should be focussing on? Share your thoughts with us.

  1. Kerry Patterson  

    Idiot! Okay, you don’t want any stimulus packages etc. Unemployment or should I say underemployment is rife. How can any person spend dollars to stimulate the economy when they are on struggle street only doing part time work. Funny how these part timers are not counted in the unemployment stats. Anyone working a few hours per week is not counted in these stats and yet they are left trying to get through on minimal income. You could improve the Budget bottom line so much by going after the big companies that somehow manage to avoid paying tax plus instead of cutting the incomes of the Welfare dependent you might consider trimming the obscene bonuses Pollies can claim.

    • Paul Buttigieg  

      When Australia decides to put Australia first and not every other country’s unfortunate but economic draining and job occupying personnel we will be a better place. Not enough consideration is given to helping our own first and all others second. There is nothing wrong with assisting other nationalities but not at the expense of Australia’s unemployed.

    • Joy Anne Bourke  

      Yes I agree. Also Pollies should not be able to retire on huge pensions when most only spend under 10yrs in politics and get a huge retirement pension and perks for life. This is unrealistic in todays world. This has to stop, No company people work for give them a pension as much as pollies get. Then pollies go get another job or are posted overseas on a huge wage and still claim the pension. STOP STOP this unnecessary payments to pollies.
      As TURNBULL SAID “the end of entitlement” this should apply to Politicans also. Not just the people who have worked hard all their lives.
      Also TAX THE COMPANIES THAT DON’T PAY TAX AND STOP ALL OVERSEAS AID PAID
      TURNBULL IS A DUD

    • Lyn Pride  

      Kerry, you will be happy to know that the Taxation Commissioner has been able to go after these big, multinational companies since 1st January. I saw him on TV and he was positively salivating at the idea of getting money out of them. I hope he gets heaps.

    • Sylvia Kennedy  

      Well said Kerry! I’ve had a gut full of this government picking on the wrong groups of people to claw back the $$$$. We are no longer the lucky country!!

  2. Guy Flavell  

    Senator Cormann’s comments should most definitely be taken as a warning as to the distinct
    possibility of recession in this country. We have been living beyond our means for many years now.
    What with 50% of ALL Australians relying on some sort of welfare handouts, personal levels
    of debt sky-rocketing to the maximum ever recorded, ridiculous house prices in major urban areas, young couples with gigantic housing loans, record Government debt with no hope of reduction and
    countless businesses beginning to fold … we are on track to be in recession within the next 2 years.
    If unemployment reaches 7% then we’ll see house foreclosures at a level similar to 1988-1992
    as people will just not be able to service their debts any more. Even a small rise in interest rates
    will have the same effect for many people hugely in debt.
    Sadly, I cannot see a path out of this awful situation which could result in 60% – 70% of people
    surviving on Government welfare, loss of our AAA credit rating, huge increases in Government
    borrowing … all getting nearer to the position Greece is currently ‘enjoying’.

    • Mareela  

      Guy Flavell where do you get your stats? There is NOT 50% of Australians on welfare. That would mean at least 12 million people. How ridiculous. We are already in recession which will only get worse next year. Unemployment and under employment is actually around 11-12%. Do you really think the government tells the truth? I don’t think so. With no money to spend by unemployed/under employed the economy will further retract. The reserve bank has done all it can to help but with no revenue we are in a very grim situation. And of course things will only get worse when we lose the AAA rating. It’s going to be a grim Christmas for many people.

      • Perhaps Guy means Australian corporations and billionaires, rather than “Australians.” Like the ones who pay less for their fuel than we do. The $12 billion worth of taxpayer funded subsidies every year.

  3. colin  

    as the party called LIBERALS are actually LIEberals , I don’t believe a word he says. and typical bully boys never take responsibility or admit to it, they love to say Its all Labor’s fault>

    • It must have been like watching satire, watching that interview. I’m speechless at how crafty, lying and downright sinister OR deluded Cormann is. But he knows that at least 50% of Australians will believe his nonsense.

  4. Rob De Visser  

    No!!! We definitely do not want more irresponsible spending such as Rudd did. Besides wiping out a decent surplus, it achieved nothing except delay the GFC problems and the chickens are coming home to roost because we’re seeing the results now. And it’s all because the ALP loves to spend – they’ve always done it and have always been voted out because of it. Well, in Rudd and Gillard we had conceivably the 2 worst PMs ever and we now have a wannabe ALP stooge as PM leading the NLP on top of an opposition so anti everything that they will ensure that their legacy will remain for a long time to come. In my view that makes this recession a lot more inevitable than the one we ‘had to have’ – also by the ALP.

    And no…. stopping pollies perks – which was largly done in 2004 or 5 anyway, will have no effect on this problem.

    • Mareela  

      Rob de Visser haven’t got time to correct your ideological driven response but suffice to say that without a doubt Abbott/Turnbull/Howard have the dubious honour of being Australia’s absolute worst PM’s and that’s a fact.

      • And I agree with you Marella. And after our world renowned “World’s best treasurer” we’ve since had Hockey and Morrison, the world’s worst treasurers, utterly determined to take us down the gurgler, which they are doing very efficiently.

  5. Adrian Collier  

    It is obvious that Australia like other Countries is clearly living beyond it’s means.

    Like other Countries this imbalance is enthusiastically supported by those gaining profits and beneficial results from encouraging the living beyond means activities and knowing that their comfort is dependent on those feeling the pain of hardship or those that are about too.

    Why do we have to live beyond our means ?

    There are many things a Government can introduce to address the above .The last thing it should do is to introduce a structure of denial to what is the most fundamental problem !

  6. John Flynn  

    The country is already in a recession !
    I run a small business in WA and I’ve never known it to be so quiet !
    I’ve asked many other business owners and they all say the same – very quiet, little income, cutting back on staff.
    It’s about time the government started taxing all these companies that are screwing the Australian workers.
    Internationally owned banks, oil companies, food chains to name a few are not paying tax and yet making obscene profits and all that money goes overseas.
    We want strong government with vision, not weak politicians feathering their own nests while Australia becomes a banana republic.

  7. Daniel  

    Australia went from a strong economic position the moment a LNP government was elected. The LNP is driven by the need to have a surplus so they can claim to be good economic managers. Sadly this will never see economic growth blossom as a surplus is also an indicator of a slowing economy. Governments who cut spending put the brakes on economic growth while a government that spends increases the economy and its growth.
    The Labour party are very good at driving the economy upwards but struggle with turning that growth into a surplus. The LNP are very good at driving the country towards a surplus but they tend to stifle economic growth in the process.
    Our current economic position is not the fault of Rudd’s stimulus package but more the LNP’s cut backs on industry spending. The fallout from the loss of the automotive industries is still a growing tsunami that is yet to peak.
    I find it funny how the LNP refused to fund the automotive industry but want to give tax breaks to large companies who minimise their current tax responsibilities.
    If I bought a business the last thing I would do is attempt to get my purchase price back asap. I would work my hardest to keep growing the business and look after my customers. Profits come from growing the business past overheads and other costs; by looking after customers first and foremost. Stockholders in my book come last on the gravy train of surplus profits. Stocks have always been a gamble for the holder of shares in a company but in today’s market many believe the shareholder comes first.
    Government needs to ensure that business regardless of how large or small pay an equal amount of tax compared to their income. This desire to allow businesses to escape taxation only increases the tax burden on those who are least able to pay it.
    Wouldn’t it be a great thing if every politician had to spend two months of every term living on the income of our lowest financial group. With all of the restrictions that the unemployed are forced to endure applied to their ability to gain a benefit. I know that the majority would stock up beforehand and most would just access their savings but I would like to see them be placed in the same economic situation as every day unemployed, elderly and the infirm people whom they were elected to serve.

    • Mareela  

      Well said Daniel. I am sick and tired of the government demonising the unemployed. It’s thanks to them and the FTA’s that there is such high unemployment and no manufacturing. To appease China and Korea Australian’ have lost jobs. And as you said they have to jump through hoops to get a benefit. I agree we are in recession. People just haven’t got the money to spend. The other big problem is the increasing casualisation of the workforce and housing affordability. What a mess our country is in!

  8. Ray Harvey  

    Australia has been living beyond its means for a long time now. Our social service costs are continually rising and hand outs to those sitting on their back sides goes on unabated. Centrelink needs an overhaul especially in regards pensions paid to those in polygamistic relationships. Cormann is the biggest DUD in politics and why Turnbull keeps him is beyond belief. He’s totally out of touch with reality and is a robot when asked questions, as you get the same answers each time in a roundabout way, and still not addressing the question raised. We ARE heading for a recession and as Paul Keating said years ago, we could become a banana republic.

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