December 09, 2004


Remember the Great Australian Recession of 2001? Of course you don't; it never happened. But it sure did loom, mostly at the ABC, and mostly in the mind of 7.30 Report host Kerry O'Brien:

KERRY O'BRIEN, March 5 2001: "On Wednesday, the national accounts for the last quarter of the year 2000 will be released. That is, the calendar year. They may show negative growth -- that is the first significant step down the road to recession. At best, they'll show a dramatic slowdown. For a government that hoped to go to the election later this year, contrasting its successful economic management with Labor's failures, none of that is good news."

KERRY O'BRIEN, March 7 2001: "The economy is now going backwards. It's not yet a technical recession - that would require another quarter of negative growth, and the jury is out on that."

KERRY O’BRIEN, March 8 2001: "Headache or not, the Woodside issue is minor compared to the Government's problems with the broader economy as Australia adjusts to yesterday's shock news that we're on the brink of recession."

KERRY O'BRIEN, March 13 2001: "The Treasurer Peter Costello did not pick a great day to try to convince fractious voters in Saturday's crucial Ryan by-election that talk of a recession in Australia is alarmist."

KERRY O'BRIEN, March 15 2001: "Opinion polls [in Ryan] are predicting a massive swing to Labor, reflecting anger over the Government's handling of the GST and petrol excise, an anger presumably compounded by news in the past week that Australia is on the edge of recession ..."

Australia somehow retreated from this brink near the edge of a shock recession, only for the danger to re-emerge this March (during, coincidentally, another election year). The ABC again led the charge:

TONY JONES, March 17 2004: "News of investors fleeing the market may have been welcomed by the Treasurer and the Reserve Bank, but is it the start of a bursting asset bubble that could drag down the rest of the economy?"

KERRY O'BRIEN, June 8 2004: "One respected economic modeller says, despite the nation's sound economic performance against other countries in recent years, he fears a housing slump could bring on Australia's deepest recession in 60 years."

KERRY O'BRIEN, October 18 2004: "A recurring question has taken on new urgency in recent weeks - how far can oil prices climb before the world's economies, Australia included, begin to buckle under the stress?"

TONY JONES, November 29 2004: "Some economists are warning of a risk of recession after the current account deficit blew out to a record $13.7 billion in the September quarter."

If we genuinely are at risk of a recession, it might be prudent to cut, say, at least $750 million from the ABC's budget. We must safeguard the economy.

(Via reader Gav)

UPDATE: Unemployment hits 28-year low.

Posted by Tim Blair at December 9, 2004 02:38 AM

"Meanwhile, as the country teeters on the brink of chaos...".
Love that line from "Austalia, you're standing in it" - a comedy series on the ABC in the '80s.

Posted by: Observer at December 9, 2004 at 03:06 AM

When Lateline ran its story they were trying to get the Opposition spokesman to say we were heading for recession, Swan said things looked pretty bright, now you know when the ALP opposition is saying things are bright, that this story is garbage.
The ABC needs to be disbanded.

Posted by: klein at December 9, 2004 at 03:39 AM

"... an anger presumably compounded by news in the past week that Australia is on the edge of recession ..."

News? This guy really thinks if he repeats his ignorant opinion often enough it becomes news.

Posted by: Mike Hill at December 9, 2004 at 03:54 AM

Mr. Hill: It's right up there with "sources say" and "a high level government official". It translates as "I'm making this up as I go along."

Posted by: Mikey at December 9, 2004 at 04:03 AM

Am I the only one noticing that these quotes prove, um, absolutely nothing?

The reports from 2001 were all stating the *fact* that we had a quarter of negative growth, and if that happened again, which given global circumstances, seemed perfectly feasible, we would technically be in recession, and a variety of business leaders and economists interviews supported this view. What's he meant to say - "The economy has contracted, our biggest trading partners in recession and a fair number of economists are crapping themselves... but Howard and Costello assure us everything's fine so let's all break out the champagne"?

And the 2004 reports similarly raise issues of economic impact and extrapolate possible worst-case scenarios on which economists and analysts are speculating.

None of these reports said we *will* have a recession, they said that given these economic realities, if things continue this way and certain external factors materialise, we *could* have a recession, which thanks to a combination of good fortune and good design, they didn't.

Yes, it's spun in a negative way, in a way that is typical particularly of O'Brien and other ABC anchors. That doesn't reduce the validity of the content of these reports.

Posted by: I probably shouldn't have wasted my time at December 9, 2004 at 04:33 AM

"I probably shouldn't have wasted my time"!
Well why did you?

Posted by: Kate at December 9, 2004 at 06:16 AM

Australia did in fact have two quarters in which domestic final demand subtracted from growth in the final half of 2000. It was only a strong positive contribution from net exports that prevented a recession in headline growth. It was a very close run. This is very different from the current situation, in which net exports are subtracting from growth, while domestic demand is still very strong.

Posted by: Stephen Kirchner at December 9, 2004 at 07:06 AM

The ABC wasn't trying hard enough.

You want gloomy? WE GOT GLOOMY!

See Stephen Roach of Morgan Stanley and get a superdose.

Posted by: Gloom N Doom at December 9, 2004 at 07:46 AM

Kerry bashing & pointing out ABC loopy left biase is not really much of a challenge.

Yes, Kerry [& the rest of the ABC news crew] will look at John Howard & the liberals through doom & gloom coloured glasses.

Big deal - no one takes them seriously anymore. Otherwise Latham would be in the lodge.

We need a BBC type review.

Posted by: matt at December 9, 2004 at 07:57 AM

Matt; "We need a BBC type review."

Whatever that is, it doesn't seem to be working. I can't think of any network outside of Al Jazeera that needs a review more than BBC!

I like Tim's solution... if the ABC insists on trying to create a self-fulfilling prophecy of a recession (by talking the economy down), then of course the government must take a look at cutting the ABC's funds ;).

Posted by: mamapajamas at December 9, 2004 at 08:41 AM

Get real Tim. If we didn't have the ABC, who's going to warn us about this impending recession, in perpetuum?

Posted by: TimT at December 9, 2004 at 09:20 AM

I haven't had time to read all the transcripts but I dare say 'economists' like the aptly named Peter Brain (left wing wacko) and Ross Garnaut (ex Hawke-Keating advisor) were involved. The two of them have been predicting recessions or depressions every year since Howard was elected.

I guess they might actually be right one day...

Posted by: Art Vandelay at December 9, 2004 at 09:23 AM

to "I probably shouldn't have wasted my time"

Well! you wasted mine

Posted by: hube at December 9, 2004 at 10:10 AM

Could be worse for you Aussies. Could be Krugman O'Brien.

Or Conan.

Posted by: beverly at December 9, 2004 at 10:26 AM

Tony Jones- Would that be the newly annointed

Walkley award winner, for excellence in

journalism as judged by Margo Kinston and

Phillip Adams ? That Tony Jones?

Posted by: gubbaboy at December 9, 2004 at 10:36 AM

Oh yes, the BBC review is in. And they're bringing it on!
10,000 BBC staff face axe,4057,11631104%255E401,00.html

Posted by: slatts at December 9, 2004 at 10:42 AM

Slatts - just read your news. Get well quick mate.

Posted by: Razor at December 9, 2004 at 10:55 AM

Who's the one respected economic modeller- bloody beardy Quiggan? When's JWH going to reveal his true RWDB agenda, and flog the ABC to Rupert to be a 24 hour wrestling channel, and SBS to Larry Flint (would you notice if SBS when full-time porno?)

Posted by: Habib at December 9, 2004 at 10:55 AM

Hey Art, Peter Brain eh? I worked for than guy as a graduate. He's a total nutcase, always running around half boozed rabbiting on about some pending disaster.

He still dines out on his claim that he called the Asian crises. Thing is he called an Asian crises every year for about a decade (and a US crisis and Australian crisis...) Even a stopped clock tells the right time twice a day.

Needless to say the ABC loves him.

Posted by: matt at December 9, 2004 at 10:59 AM

Meanwhile, the latest unemployment figures have just been released, with the rate down to 5.2%. About 28 000 full time jobs were created in November.

So Pffft! to you, Jones et al.

Posted by: fielding at December 9, 2004 at 11:02 AM

If we sacked all the ABC journalists, they would have the bump in unemployment figures they've wanted for so long.

Posted by: Evil Pundit at December 9, 2004 at 11:10 AM

According to Al Gore's graph in Earth in the Balance, all life on earth ended in the year 2000.

According to Paul Krugman, we should be bartering canned food and rifle cartridges for women and coal as I write this.

Don't these people get tired of being right all the time?

Posted by: richard mcenroe at December 9, 2004 at 11:17 AM

2001 – don't remind me. I had to sell a metre of my lower intestine for a can of dog food that was a month past its use-by date.

Posted by: Pig Head Sucker at December 9, 2004 at 11:47 AM

what about underemployment?

Posted by: M.D at December 9, 2004 at 12:51 PM

Bah! Here, if anything, is the correct occasion for that broken-clock analogy. Doomsayers have to be right at least once every century or so.

Posted by: Rebecca at December 9, 2004 at 01:23 PM

Hey Matt, that rings true with a story a mate told me - he had a couple of job interviews with Brain and said he was a freak.

Not only do I remember him predicting an Australian recession due to the Asian crisis, he also tried with SARS, 9/11, the GST...any I've missed?

Posted by: Art Vandelay at December 9, 2004 at 01:42 PM


Underemployment is also at historically low levels. I haven't got up-to-date stats but here is the situation as it stood last year.

Posted by: Pig Head Sucker at December 9, 2004 at 01:47 PM

Brain called the Asian crisis, but Matt is right: he called it every year for a decade. But then again, so did every political economist working on Southeast Asia. You didn't have to be very bright to work out that massive corruption, a property bubble that could eat New York, overspending by the state on infrastructure projects that ended up in the hands of the elite's children, crony capitalists who made their money and invested in Singapore and Australia, etc, would lead to financial trouble. Doh!

But here's the kicker. In 1998, basking in his five minutes of glory after "calling the crisis", Brain said that a currency crisis could hit Australia in the near future, forcing the Reserve Bank to increase interest rates sharply, putting the economy into recession.

Yes, well called Peter Brain!!

Posted by: Hanyu at December 9, 2004 at 01:58 PM

I will go out on a limb here and predict that comrades brian and jones will predict a recession in late 2007.

actually even more outrageous was the incessant campaign during the recent election by these biased twats that "interest rates will be straight up after the election regardless of who wins". Of course the reserve has now confirmed steady as we go until the end of the year.

finally lets us not forget that jones for a long time presented mr and margot as a balanced panel of opinion.

Posted by: astonished at December 9, 2004 at 04:27 PM

What are these plonkers on about - the current account deficit? Every mine that I know about in Australia (including the one I work at) is buying new equipment like crazy and ramping up production. Of course the initial burst of such buying will result in a blowout.

Posted by: Rob at December 9, 2004 at 05:42 PM

>10,000 BBC staff face axe

They employ 28000, so they should probably axe some 15000 employees - or better still, sell it to the private sector.

Posted by: jorgen at December 9, 2004 at 07:42 PM

I have this theory that journalism and the arts communities are quite close to each other. Even the name of their Union suggests this. The Media, Entertainment and Arts Alliance. Creativity is valued in the arts community, and is an essential ingredient in entertainment. When it comes to journalism, we expect careful and truthful examination of the affairs of state, or whatever. These days it is available from some, but only a minority of writers and presenters. Many journos have gone so far down the path of Creativity and Opinion that they are really more in the realm of political apparatchiks.
Ellen Fanning in her navel gazing series for SBS earlier this year asked the question of many journos - when did you cross the line and let your emotions get away with you rather than pursue the subject in an objective manner?
Some, and Kerry was one, were confident in their professionalism and correctness. One stood out for me - Maxine McHugh - who spoke the searing truth in saying that many of her colleagues live in classy suburbs away from the social coal-face. They are out of touch with ordinary people, and their presentations of subject matter are coloured by their personal circumstances and social groupings.
Today's Radio National program "Media Report" in examining what was the inportance of Truth in 2004 also reflected, with less directness, that this was a factor.
Until such time as journalists and TV presenters (not to mention the ALP) get back in touch with the broader electorate, we will continue to be served up programs and articles which have a subtext of "lets help embarrass the conservative government" rather than "what is in Australia's interests."

Posted by: geoff at December 9, 2004 at 08:32 PM

in Fanning's Fine-Line series MCkEW ALSO ADMITTED that she and many other journos wilfully ignored catastrophic domestic violence and other shocking signs of extreme dysfunction in indigenous settlements.This was covered up systematically by the Media in order (she said) to advance the cause of self determination. Fime journalist-I think not!!!!!!!Shame McKew shame...

Posted by: crash at December 9, 2004 at 09:38 PM

Tony "Taliban" Jones and "Red Kezza" O'Brien?

What a pair of plonkers.

Amanda Vanstone should declare open season on them.

Posted by: Pedro the Ignorant at December 9, 2004 at 11:54 PM

That's "smirking" Tony Jones!

Posted by: crash at December 10, 2004 at 12:19 AM

Meanwhile, as the country teeters on the brink of chaos...

You're Australians. I thought you called that "Friday."

Posted by: richard mcenroe at December 10, 2004 at 11:40 AM

I'm really pissed of with John Howard.We had a recession in 1981 another in 1991 and expecting another in 2001,I put off buying my small factory that was to be my super.Now I've paid an inflated price and have to cop it from Bob Carr on land tax and stamp duty.
We need a recession every 10yrs to clear the nostrils and keep me in my place.

Posted by: Sonjhos at December 10, 2004 at 11:23 PM

That was a long time ago.Never the less,we need credible opposition to keep the Coalition on their toes.I fear it will be along time coming.

Posted by: Sonjhos at December 10, 2004 at 11:39 PM