It’s no wonder many in the Queensland business community are anxious and desperate, as the Courier-Mail is reporting, given the Premier’s apparent abandonment of the national plan on reopening the economy (see Queensland business suffering mental and financial health crisis made worse by Covid uncertainty). Alas, we are living in a new age of irrationality. COVID is coming, and based on recent incidents is probably already here in Queensland, and the last thing we need is hysteria and panic when our leaders should be calmly and methodically planning for our public health response.
Regarding the June quarter National Accounts that were released by the ABS on Wednesday, the Queensland Treasurer has been fulfilling one of his duties by talking up the economy, pointing to the strong growth in business investment (e.g. see charts below). He’s right to celebrate that, but June quarter seems like ancient history now given the lockdowns-and-border-closures-afflicted September quarter we are currently in. Terry McCrann had the best take on the June quarter data in his column Earth to idiots: We are in recession:
The core idiocy is of course the fixation on “two successive quarters of negative GDP” as proof of a recession – sometimes, equally idiotically modified to being proof of a “technical recession”.
There’s nothing “technical” about a recession. There is only basic reality – businesses going broke, large numbers of people losing their jobs.
The whole country is in recession right now.
I would disagree with Terry McCrann on one thing, though, when he says “Queensland is being hit hardest because of the importance of tourism and with its two main domestic sources (self) cut off with its own border closure.” While tourism-dependent regions such as Cairns and the Gold Coast are no doubt very badly affected by border closures, at this stage I suspect the whole state hasn’t slumped as much as NSW and Victoria which have experienced longer lockdowns. After all, Queensland coped with the initial round of lockdowns and border closures better than southern states (e.g. see my post from August last year Mining & Ag have partly shielded several Qld regions from COVID shock).
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Gene I think Qld will suffer greatly from the long border closure, expected now to go though into 2022. Early next year will see the Qld economy slump as NSW and VIC power out of their recessions driven by massive state stimulus and open borders to the world. Qld tourism will miss out on the domestic boost of Xmas and then the exodus of travelers heading overseas as international borders come down in the new year. The new year will also see a quick turnaround of people who have left NSW and Vic to Qld recently, as their economies rebound and demand for labour and services drive demand, early 2022 will be interesting.
Thanks Glen. That’s very possible. Thankfully the Premier appears to be backing away a bit from her isolationist stance last week based on her press conference today…