| 07.03,19. 02:27 PM |
Interest rates may get cut as economy founders
The Reserve Bank may cut interest rates in the next few months. (AAP)
The Reserve Bank could make interest rate cuts to bolster an economy that has entered what some experts have labelled a "per capita recession".
The economy grew just 0.2 per cent in the December quarter, less than population growth.
The economy has "slammed on the brakes", Your Money's Brooke Courte told 9News.
"We don't usually talk about that growth per capita.
"What people are doing is saying you can't strip out the fact we have a pretty decent population growth.
"Let's look at what the economy looks like without population growth. There's not a lot going on."
The Reserve Bank kept rates on hold for the 31st consecutive month on Tuesday, but the Australian Bureau of Statistics (ABS) figures released yesterday may force a rethink.
"The economy at this turning point looks like it might need the help of those who are in the driving seat," Courte said.
But 9News political editor Chris Uhlmann said the idea of a "per capita recession" was a meaningless term being pushed around by "pencilhead economists".
"I was around for the last one, unemployment hit 11 per cent," he said.
"At the moment it's five per cent. Let's not throw around a term that is serious."
Shadow Treasurer Chris Bowen slammed the Morrison government over the disappointing financial figures.
Mr Bowen said the figures were the result of a government "without a vision for the future".
"Today was the first full quarter of economic management under Scott Morrison and Josh Frydenberg," he said yesterday.
"The last full quarter before the federal election is called. It's a quarter of failure."
Mr Bowen said the results were a "damning indictment" on Mr Morrison and Mr Frydenberg's economic stewardship.
"Per head of population, the Australian economy has gone backwards," Mr Bowen said.
"This is the first time this has happened since 2006. It's only the third time it has happened since 1991."
Prime Minister Scott Morrison deflected talk of the per capita recession during a press conference yesterday.
"I noticed that the Leader of the Opposition, that Bill Shorten is talking a lot about wages," he said.
"I will tell you this - the only wages that will go up under Bill Shorten's Prime Ministership will be the wages of the people smugglers."
The Business Council of Australia CEO Jennifer Westacott said the figures should serve as a wake-up call.
""We have to now find a way of making sure that doesn't get any worse," she told ABC.
"We've got to double down on investment. That is the crucial thing here."