Victoria slides into recession with SA, Tasmania
Large parts of Australia are in recession. Photo: AFR
Victoria has slumped into recession, along with South Australia, Tasmania and the ACT, as Australia's two-speed economy has sent much of the country into reverse.
The Bureau of Statistics reports that state final demand - the total spending of consumers, business and governments - fell 0.7 per cent in Victoria in the December quarter, in trend terms, on top of a fall of 0.4 per cent in September.
Investment in the state has now fallen for three quarters in a row, falling 5 per cent in that time. Asset sales cloud over how much of that is in the public and private sectors respectively, but the Bureau reported last week that as a share of output, capital expenditure by Victorian business has now fallen to the levels of the 1990-92 recession.
Government spending on services – Federal, state and local – fell 1.5 per cent over the same six months, and even household spending declined 0.1 per cent in the December quarter.
It is a similar story in South Australia, where state final demand fell 1.9 per cent in the second half of 2012, while in the ACT it fell 0.7 per cent. Tasmania is the state suffering worst, with trend spending levels falling 5 per cent over the past five quarters.
By contrast, total spending in Western Australia rose 4 per cent in that time, and by 11.1 over 2012. Queensland has slowed abruptly, with state final demand up just 0.7 per cent over the past six months, while NSW is now the second strongest state, with spending rising 1 per cent in the six months, and 2.7 per cent in the year.
Victoria's demand fell 0.3 per cent over 2012, Queensland and the ACT rose 2.5 per cent, SA fell 0.1 per cent. The Northern Territory, with 1 per cent of the nation's population, accounted for almost a sixth of its growth, with spending jumping 30 per cent over 2012 as new mining projects got under way.