Recession talk 'alarmist': Malcolm Turnbull and Scott Morrison

Recession talk 'alarmist': Malcolm Turnbull and Scott Morrison

Whatever you do, just don't mention recession.

That's the message from Malcolm Turnbull and Scott Morrison, using interviews on Thursday to hit out at language they call alarmist and unhelpful – a day after the end of five continuous years of economic growth for the Australian economy.

Wednesday's national accounts figures for the September quarter showed the economy went backwards by 0.5 per cent, surprising forecasters and sending shock waves through the federal government.

The results were Australia's first decline since March 2011 and the largest fall since the global financial crisis, but economists believe the results could be a one-off.

Prime Minister Malcolm Turnbull and Treasurer Scott Morrison are warning against talk of a recession.

Prime Minister Malcolm Turnbull and Treasurer Scott Morrison are warning against talk of a recession.Credit:Alex Ellinghausen

Negative figures in the December quarter would equate to a technical recession, representing two consecutives quarter of negative growth.

Asked on Melbourne radio 3AW if the results represented a pothole of a cliff for the Australian economy, Mr Turnbull said they were "a bump in the road".

"We've got to make sure, it is up to us whether it is a pothole or a cliff," he said.

"What it requires is policies that support investment. If you improve the return on investment, you get more investment. We're seeking to do that.

"What's Labor doing? They're opposing that and they're proposing increased taxes which will reduce the incentives to invest."

Mr Morrison said Australia was not headed for recession and warned against dangerous predictions for the economy.

"That is not the sort of alarmist thing that people should be leaping to," he told ABC radio.

"The market economists have been making that point pretty clearly.

"There have been some factors around these results and others have commentated on the uncertainty following the election and these sorts of things and the good signs are there, particularly in this quarter and, in my own discussions with business, also indicate that yes they did have a tough quarter in September but things have picked up in the following quarter."

The Treasurer wouldn't say if the figures were an aberration, arguing the government needed to ensure national economic policies would drive investment.

"This is the key message, not just out of this national accounts but the last 12 national accounts, which has shown as the mining investment boom [ends] we transition out of that. That has had a big impact on investment in this country."

"Engineering construction has fallen by more than 50 per cent since the peak of the mining boom.

"We also saw in these figures weaker figures on building construction. The [Australian Building and Construction Commission] restoration couldn't have come at a better time.

Shadow treasurer Chris Bowen said Labor wouldn't supporting the government's corporate tax cuts, worth $50 billion over 10 years.


He slammed Mr Morrison for offering plans to boost growth by only one per cent over the next 20 years.

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Tom McIlroy is a political reporter for the Financial Review in the federal press gallery at Parliament House.

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