Australia’s Econ­omy is a House of Cards

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By Matt Bar­rie & Craig Tin­dale.

I recently watched the fed­eral trea­surer, Scott Mor­ri­son, proudly pro­claim that Aus­tralia was in “sur­pris­ingly good shape”. Indeed, Aus­tralia has just snatched the world record from the Nether­lands, achiev­ing its 104th quar­ter of growth with­out a reces­sion, mak­ing this achieve­ment the longest streak for any OECD coun­try since 1970.

Aus­tralian GDP growth has been trend­ing down for over forty years
Source: 
Trad­ing Eco­nom­ics, ABS

I was pretty shocked at the com­pla­cency, because after twenty six years of eco­nomic expan­sion, the coun­try has very lit­tle to show for it.

Advance Notice

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I’m speak­ing at a United Nations Envi­ron­ment Pro­gram con­fer­ence in Bangkok next week, and giv­ing some pub­lic talks there as well, so I’ve writ­ten my posts for the next two weeks for Busi­ness Spec­ta­tor already–on the topic of Aus­tralian house prices.

The ABS will also release its House Price Index data next week (on Mon­day Novem­ber 4th) and I’ll try to update a key graph in next week’s post–the cor­re­la­tion of the accel­er­a­tion of mort­gage debt to change in house prices–with that data before Busi­ness Spec­ta­tor posts my arti­cle. Prior to the ABS data being pub­lished, this indi­ca­tor is con­sis­tent with house prices ris­ing sub­stan­tially in real terms (see Fig­ure 1).