Economic déjà vu: RMIT expert comments on the likelihood of Australia heading into a recession

Dr David Hayward, Emeritus Professor, Public Policy and the Social Economy (+61 416 174 833 or david.hayward@rmit.edu.au)

Topics: economy, state budget, recession, cost of living

“There are a lot of similarities between the state of the economy in Victoria now and what it was like in the late 1980’s early 1990’s.” 

“Back then Labor was in office and net debt started to climb.” 

“The Victorian Treasurer advised that his 1989 state budget was the toughest in living memory, with the state’s finances in very stressed state.”

“Shortly after, the federal government pushed interest rates up to over 17% as did governments around the world, and Victoria plunged into a deep recession, with unemployment hitting 13%. State deficits and debts climbed alarmingly.”

“Net debt now is higher in real terms than it was in the depth of the recession back then.”

“If the Reserve Bank's tightening of monetary policy continues, the Australian economy may be pushed to the brink, while Victoria’s may well be hit especially hard.” 

“Many people who are still recovering from the economic brunt of COVID – especially those working in or owning restaurants, cafes and tourist accommodation and services, are going to find conditions worsening just when they desperately need it to be getting better.”

“Victoria and greater Australia may feel a genuine sense of economic déjà vu. Are we on the verge of another bout of painful and unpopular privatisations and other desperate ‘fix-its’ designed to rescue the economy? We may well be about to find out.”

Dr David Hayward is Emeritus Professor of Public Policy and the Social Economy at RMIT University. David’s research interests are the funding of social policy, with a focus on the State Governments. He writes regularly for the Age and Sydney Morning Herald and is a frequent expert commentator for the ABC.

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Interviews: Dr David Hayward, +61 416 174 833 or david.hayward@rmit.edu.au

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