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Why Australia Hasn't Had A Recession In Decades

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America's economic expansion is approaching a big milestone. If the U.S. economy keeps humming until July 2019 it would be the longest period of growth on record. The expansion would be exactly one decade and one month old by then. But there's another country with an even more impressive run. Australia hasn't had a recession in 27 years. » Subscribe to CNBC: http://cnb.cx/SubscribeCNBC About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more. Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: http://cnb.cx/LikeCNBC Follow CNBC News on Twitter: http://cnb.cx/FollowCNBC Follow CNBC News on Google+: http://cnb.cx/PlusCNBC Follow CNBC News on Instagram: http://cnb.cx/InstagramCNBC #CNBC #Australia Why Australia Hasn't Had A Recession In Decades
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Text Comments (2089)
CNBC (1 month ago)
Australia hasn't experienced a recession for nearly 30 years. Is there an economy that's better positioned for the next 30 years?
JJSC (3 days ago)
Hah, I think you need to examine Australia's grossly frighteningly inflated residential real estate market. They'd better pray.....hard....that it's a soft landing, as something called negative gearing has produced astounding levels of tight-margin, debt fuelled leverage in real estate. The perfect system for a real estate run....the wrong way. And Australians are inherently frugal overall (except real estate) despite having some of the most costly living expenses in the world. The minute real estate drops, retail and other spending reacts sharply. Look for the beginnings of a recession in 2019. Whether it's mild it not, remains to be seen.
user_mac01 (9 days ago)
+M Cruz Because the house market is artificially inflated by foreign investment in Real Estate and greedy estate agent practices. House prices are the most expensive in the world. Its a bubble, because the pressure on first home buyers is not set by the local market and there's no reason at all why owning a home here should be expensive. Asia is raining on our parade.
NoPain NoGain (14 days ago)
They steal workers tax money, highest in the world to feed bums that don't work Highest tax on cigarettes and alcohol, highest in the world, but always cry broke Homes have risen in prices ×10 , the people are poor besides the rich Australia is going down, basically due to free money to bums and muslims that breed like rabbits and don't work Also selling everything to China whilst wages are low
jason prevo (23 days ago)
Another reason Australia has had strong growth is because they have a high minimum wage and universal healthcare allowing their citizens to spend more on good and services.. but you left that part out...
Chocolate Milk (24 days ago)
Get your facts straight, Australia is prolonging the housing crash, if that happens it will be worse than the recession in the US. The US economy is so large and diverse it can handle a recession
Chris (2 hours ago)
Australia buys it's way out everything, we borrow from China, the reserve Bank has money few people know about I've seen it, Australia is due for recession as soon as China sneezes, when our government buys things like trains from China over the local workforce you can guarantee there are plenty of deals done behind closed doors
Neil S (10 hours ago)
oh boy dont worry u will have it very soon
Rori Clare (1 day ago)
Yeah, we're kind of reliant on the chinese economy to a terrifying degree.
waiting 90 days to change my name (1 day ago)
Answer: because they're irrelevant.
Sam Dawkins (1 day ago)
1 reason Australia has done so well for so long... John Howard
Zyzz (3 hours ago)
He is a good man
Aaron joel (1 day ago)
Agreed!
WantonMyth (2 days ago)
Australia had 'The recession we had to have' in the in early 90s, and quite frankly we never got out of it.
DC180 (2 days ago)
Hahaha just wait in a few years! only when the tide goes out do you discover who has been swimming naked
Gus Driving In Australia (3 days ago)
You can see the Abbott years in the graphs.
Element X (5 days ago)
Australia the guy who cheats on his girlfriend and gets busted by the girls best friend then the girlfriends parents find out and give the bad bloke a free pass after he apologises and proposes to said future wife, of course she accepts.
Rich Lau (5 days ago)
What's wrong with all the people saying Australia is being exploited by China... Come on, China BUYS and Australia SELLS, simple as that. Shouldn't Australia be a bit more appreciative? No one else could buy as much as China does.
Singh Anmol preet (5 days ago)
Is anyone not gonna mention how during this time India was one of the only countries in the world that hadn't faced recession (in 2008)?
Singh Anmol preet (33 minutes ago)
+What The your name suits my reaction perfectly. What the ****. Not funny bro, and certainly not true.
What The (37 minutes ago)
It doesn't count when most of the population has no access to a toilet...
VAces_ (6 days ago)
what about poland
Blake Ward (6 days ago)
Plot twist: Chinese buyers drive up the price of Australian housing exponentially.
HazyHerbivore (6 days ago)
Strong economic management by the labor party in spite of the blatant corruption by the lnp, that's why
Gloryious Tyrone (6 days ago)
Housing bubble is about to burst. Iron mining bubble has already burst. China is moving their supply to Africa. Oil and gas is becoming more and more unsustainable economically. I hate to say it but, unless we change our stance on how we function globally in an economic sense, our high wages will never grow with inflation. I’m worried about the future of our country for the lower-middle class. We may not be in a technical recession but we haven’t seen large growth in a long time which is more telling to a negatively geared economy.
Des Hood (9 days ago)
Just wait till Bill Shorten gets in power, then you will see the biggest Recession you have ever seen.
Ben Chesterman (9 days ago)
Bob Hawke is the reason we had a recession 80s Democratic socialism policy +user_mac01
user_mac01 (9 days ago)
@Des Hood: LoL Are you seriously suggesting the LNP can do better than it is now? Corporate crime is finished, once the LNP scammers fail coal they won't have any start up capital anywhere - choking the LNP lice with them. Then you will see the biggest aussie Boom you have ever seen.
simone foster (9 days ago)
Soon and it will be big.
OZINVESTING (9 days ago)
Australia will get smashed in the next recession, don’t you worry!
Graeme SYDNEY (9 days ago)
A lesson in life - you make your own luck.
UteChewb (11 days ago)
The main reason Australia has not had a recession is the hard work in the 80s and 90s to restructure the economy and refocus on Asia. That work has not been continued and the nation has been sitting on its laurels ... a dangerous situation.
Ben Chesterman (9 days ago)
Kicked Bob Hawke out prime minister 80s was a good thing
Doesn't Hurt Yet (11 days ago)
87% of immigrants don't get a full time job within 5 years of being in Australia they sit on centrelink (welfare) the whole time. 13% of people cant make enough money to pay tax for another 5% on welfare let alone the next 82% This is the most uninformed video iv ever seen on Australian markets
Doesn't Hurt Yet (11 days ago)
I don't think you know what a recession is, or how markets work, and why did you first say "resources" then address retirement fund? This video is made terribly.
Dee Boy (13 days ago)
I’m here in Australia, they forgot that also there is shitloads of immigration to top up the GDP
Absintholic 999 (13 days ago)
Australia isn't a lucky country anymore since the immigrants come here and live on Centrelink benefits.
HentaiCommunity (14 days ago)
lol haven't u idiots seen our economy lately it a matter of time Australia private debt all world record high of 211% and getting higher and the quarter grow of 0.2 percent for the first quarter humm let me see 2019 the year we going to see that 27 year steak go bye bye
Arthur Watts (15 days ago)
When Donald Horne coined the term 'Lucky Country', it was meant to be a *warning*, not a term to be bandied around by politicians and developers. https://en.wikipedia.org/wiki/The_Lucky_Country That was 1964 - even then, some could see that ripping stuff out of the ground and shipping it someplace else wasn't sustainable. Like many in the Pacific, our fate rests with China's ongoing willingness to do something else that is completely unsustainable - ignore fundamentals to continue with bonkers nation building projects while the world holds its collective breath and prays that the circus can somehow keep performing to analysts expectations. The difference is that when unemployment reaches 20% in Australia, its unlikely that we'll need to call out the military to crush the angry mobs on the streets. The housing bubble may well deflate and make homes 'affordable' but when banks wont lend to anyone with less than 20% deposit (and a 'safe' job, if there is such a thing), that will be cold comfort to many of us. The incoming Labor government will undoubtedly try to spend its way out of trouble but without all that lovely money from China, I wish them every success with that. Interesting times ahead.
ray bon (15 days ago)
It succeeds for one reason limited immigration and the few they do let in are educated and have to be gone in 12 months under there agreement
Ben Chesterman (9 days ago)
who fuckeda Australia Bob Hawke 80s our last recession
Australia (16 days ago)
Australia’s about to be in a recession
Kers1 (16 days ago)
People are sitting her saying Australia survived recession because of China but just forget the 2007-10 government were the best financial managers in the entire world and the entire Parliament worked together to fix the recession within weeks while the US took literally 2 years to react.
Ben Chesterman (9 days ago)
Kicked bob hawke was a good thing
Sean Yee (16 days ago)
Australians are bunch of lazy and stupid ppl. Bcos of their pride and stupidity, they can't have technologies like those Germans, Americans, Japanese, Chinese and Koreans. Countries like these experience recession, bcos their rapid development created space that need to adjust the fluctuation. Hence, Australia economy development rely mainly on natural resource they have. At one time, America offer to transfer technologies to Australia, and the reply "we don't need your technologies". I have friends and relatives who study and live there, when met them, they talk and feel like everything is the best in Australia. In effect, I only see products from Australia are dairy products, pharmacy vitamins or low tech products from their country. Yet, these ppl think like they are the most advance country in the world.
Ben Chesterman (9 days ago)
Bob Hawke 80s caused our last recession 80s , kicked him out been better for consumers since and small business owners
Binh TC Nguyen (16 days ago)
don't jinx it.
James Irving (17 days ago)
Thanks for jinxing us CNBC. We were doing fine until you bloody said anything.
NiteOwl (12 days ago)
I wouldn't say that, we got here hard by the market crash and it's ganna take a lot to fix it. We are however doing better then most of the rest of the world.
Ashley Wang (18 days ago)
shh you'll jinx it
SimplyHackin (18 days ago)
And they still cant afford decent internet.
Imperial Mort (18 days ago)
Australia has a per capita recession right now.
J C (19 days ago)
Australia has had several per capita recessions. It’s high immigration that prevents any “technical recession”. Also those mentioning “high minimum wages” are wrong. Junior workers have far lower wages that are preferred for hiring in retail and adults in minimum wage service jobs have far lower hours than in countries such as the US
Ben Chesterman (9 days ago)
Bob Hawke caused our last recession 80s , 65% consumption tax back then , 25% interest rate s on business
terrythekittie (19 days ago)
Australia may well be in a recession now.....the Morrison/Turnbull/Abott LNP government (yes, that's three Pms from the same party cannabalising each other in succession) have allowed banks to run rampant in the last five years, have stalled wages growth, have stripped away worker's penalty rates while at the same time allowing wealth to trickle up or more like flood up to the wealthiest ten percent and that situation means people do not have enough disposable income to spend....there are few jobs and Australia can't rely on mining forever...the current government have not planned for the future...it's pretty dire now but if they were to be re-elected it could be the beginning of the end for the 'lucky country'.
anthony mills (19 days ago)
The reason is immigration in 1992 the population in Australia was 17.5 million. Today its 25 million. Adding 7.5 million to the population can have that effect on growth.
Crucial (19 days ago)
Wonder if they'll mention about the fact about our union movement not being a frail shell of itself like in the US
user_mac01 (9 days ago)
You haven't lived long enough to know how much has changed since the days when Hawke was ACTU boss. In my time there is the hippy/skinheads/sharpy/surfie era, JFK is shot, his brother Robert Kennedy shot, Man lands on the Moon, decimal currency, Mamas and Papas, Black Sabbath, Deep Purple, The Who, Pink Floyd, Rolling Stones, Led Zeppelin, Credence Clearwater Revival, Beach Boys, Vietnam War, Beatles visit, Menzies, Holt, McEwen, Gorton, MacMahon, the Whitlam government, $100 dollar bill, AC/DC, Men At Work, Jo Jo Zep, the Fraser 'years', end of Board of Works, Hawke, PC computer era begins, Nirvana, INXS, Keating, end of 1c and 2c piece, end of $1 and $2 note and the introduction of $1 and $2 coins, the TCP/IP internet begins, CD-ROM kills the vinyl LP and turntable, nylon $5 $10 $20 $50 and $100 bills, net browser wars, the Howard 'years', DVD slowly supercedes CD-ROM, mobile phones begin, CBA lists public shares, Telstra sell off, Rudd- Gillard-Rudd, Abbot-Turnbull- Morrison... Not to mention the change in car industry production, computer Engine Management, Remote Central Locking, Power windows, Electronic Ignition, Electronic-servo transmission.
Connor McKenzie (19 days ago)
It's election year in Australia, so please be wary that a lot of the concerned comments made by Australian's below are probably referencing headlines that have just occurred in the news cycle. As an Australian, I can recognise that each and every country has it's problems, and we are no exception. But as an keen economist and slightly right of centre political view, I'm interested in the stats I see on the page in front of me. I'm not a massive fan of comparing Australia to America (different policies, culture, population etc.), and we see it all the time with hot topics such as gun control. However both countries learn from each other good fortunes and mistakes, and the notion of setting policy for the future is key to success. The reason I believe Australia is seeing constant growth, whether it be small or large, is from long term visionary policies set 15-20 years ago. We like to nit-pick and criticise economic policies all the time, and while it's important to identify possible or occurring problems within these policies to continue to strengthen them, we need to be grateful for the high quality standard of living that most Australian's enjoy (and I again recognise the small but important number of people who don't believe they are reaping the rewards from a stable economy, such as the homeless). And as of today, the news cycle has spat out headlines 'Australia in recession', which is completely incorrect. The stats they are referencing are talking about 'GDP per capita' which declined in growth in the past two quarters, which if I were to stop here, would be 'recessionary' growth. However, the Australian economy as a whole, or 'nominal GDP' grew again in the past quarter, and unemployment continued to fall. Nominal GDP is the standard of which we record our economy's growth. The housing bubble is a real problem in Australia at the moment, and is probably the biggest problem facing Australian economists, and they are working tirelessly to make sure that doesn't burst, but if it does get to a point where the housing market is in chaos, it is only a part factor of the economy of Australia, and I highly highly doubt that Australia will suffer greatly from it. Australia is well suited to deal with economic shocks, and while currently Australia doesn't have a budgetary surplus (like nearly every industrialised economy), our back channel economy is strong. I believe the Australian economy is better managed than other western countries, and I believe this is the case because unlike other countries, the political chambers of Canberra have only so much power to impact and change the economy, as they mentioned in the video, the Reserve Bank of Australia is a separate entity from the government, and no partisan policies impact things such as the floating exchange rate or the interest rate as examples, but instead give the power to the people of Australia to impact and change the economy, as all free markets should be. It's a long comment, but I've seen a few of these videos comparing Australia to countries like America, and the short sided, attention grabbing comments I always see makes me a little angry as they aren't considering how 'lucky' we are. Please, if you have any interest in engaging in discussion about this, reply! If you agree, tell me why, if you don't, please tell me why! Discussion is key to progress.
Cold War Hero (19 days ago)
Um about that.
Brad Audet (19 days ago)
We haven’t had a technical recession because when we should have taken our medicine in 2008 like the rest of the world the then Government got out the country’s credit card and splurged. Now our next recession is going to be a disaster and we have no tools left. We owe too much, we have been stuck on minimal interest rates since then so no levers to pull and the household debt against overpriced property is a waiting avalanche as soon as things start turning.
Ben Chesterman (9 days ago)
Because we don't have wanker Bob Hawke Prime minister . New cars are tens of thousands cheaper since 80s
Phlegethon (19 days ago)
Jinxed it.
Matthew H (19 days ago)
Jokes on you CNBC! We have officially hit a recession this week.
Nathan Rath (19 days ago)
Per capita
Ozsharpener (19 days ago)
TBH Australia is entering recession now.
Zyzz (1 hour ago)
kuldeep der such as
kuldeep der (1 hour ago)
Oz has all the attributes, which Iceland had before it cracked open leading GFC.
Zyzz (3 hours ago)
Ozsharpener won’t happen
X (19 days ago)
australia has officially entered a recession apparently
Henry Higgins (20 days ago)
+ thats because our politicians run a Ponzi scheme by importing rich immigrants wanting our passport . These immigrants need houses , The rich buy the houses 100+ the prices go up due to demand and they sell to the immigrant . Bank gives the loan . instant $700.000 added to the economy . Basically the super lazy Australian politicians are robbing Peter to pay Paul and kicking the can down the road for the next generation to pay up .
Wild Man (20 days ago)
Increasing immigration reduces share of gdp per person.
J Knox (10 days ago)
But boosts GDP through more people working and paying tax. DOn't be stupid. There is a reason why the Chinese, American and Japanese economies are so massive. Huge labor force and cutting edge technology.
someguy604 (20 days ago)
It's the kangaroos and boomerangs
Michael Fitzgerald (20 days ago)
As an australian, I can say that whilst the stats are technically correct. They are a misrepresentation of the reality in Australia. A lot of problems have also boomed because of the alleged "progress"
Tiny Elephant (21 days ago)
One of the only reasons china managed to survive 2008 easily is because off the massive amounts of money it poured into its own economy. But that method has flaws and the cracks from that strategy are already starting to show about a decade later.
Grøsha (22 days ago)
STRAYA MATE
David G (22 days ago)
Its because we have sold huge amounts of our country to China.
darkhawk1979 (22 days ago)
Also our banks didn't give sub-prime loans.
Great Chief (22 days ago)
With the last point Australia also has a large list of international donations which are basically trying to build up markets as well as infrastructure. This is to let the demand for our resources grow and increase the efficiency of our exportation process. E.g. Funding a new port in Indonesia allows trade to be more desirable and reliable. With regards to China I believe it's not a massive issue as large economic growth is a current trend with a number of our neighbours, such as India and Indonesia.
Trevor Clark (22 days ago)
Last time I checked half of Australians are underwater on there mortgages look it up. There housing market is close to bursting
ryang58 (22 days ago)
Thanks to the baby boomers. Now everyone under the age of 30 is hoping for the housing market to collapse. over 60's have at least two properties going into their retirement and have completely blocked the younger generation from getting into the housing market. My family home was bought in 2003 for 345,000 dollars, now it is worth over 610,000. And I do not live in a major city. I honestly can't wait for the inevitable collapse of the housing market. All that greed will backfire and everyone else will finally have a chance to own a home haha
Ki-Sean Excell (22 days ago)
The UK should look into that type of Pensions plan. Save them an insane amount of Debt.
Big Red (22 days ago)
Thank Trump ! We keep winning !
nee nee (23 days ago)
Guess which superstate doesn't have a well organized central bank? The EU! :(
SuperJohn12354 (23 days ago)
Australia has been incredibly miss managed, we had a run with a well run government that put us in a position where we did not owe any money, that's right nothing, in fact by the time that government had been voted out we have 900 million in the bank, now we owe Billions, our debt to GDP is higher than America, its only the Chinese Resource boom and the fact our mining sector is very well run that we didn't have huge issues from a Labour government that saw the Global Crisis as an excuse to spend up big and buy votes. In simple terms its been Dumb luck.
Amir Aimvn (23 days ago)
Australia got steve Irwin blessing...
wacko jacko (23 days ago)
America's been doing well because of Donald Trump and you won't admit that
ryang58 (22 days ago)
Why would they? This isn't a video about " Why American hasn't had a recession" Read the title? The video is called "Why Australia hasn't had a recession". Politize the topic of economics elsewhere.
Alex Mitchell (23 days ago)
Hahahaha this is completely made up! (I’m Australian) we had a recession during the gfc.
ryang58 (22 days ago)
No, we didn't... We had a minor economic downturn and that was it. How old are you mate? Have you ever experienced an actual recession?
Naz A.I (23 days ago)
It also helps asian elite prefer moving to australia than us since 2008.
Τζακυνθος Φριτοπουλος (23 days ago)
Jews don’t control the banks in Australia. I just saved you 5 minutes.
gebk9 (23 days ago)
No need to make Australia great "again"... We are and will always be great :D
shane (23 days ago)
When the housing market collapses here it will readjust the economy.
William Thompson (23 days ago)
Flat earthier Australia doesn’t exist it’s just a conspiracy theory Me no it does actually ensite Flat earthier no it doesn’t your dumb Me no it does I am starting to think you’re crazy Flat earthier f you
Michael Talley (23 days ago)
They don't have wealthy people running their country.
Patrick Arrow (22 days ago)
No, one of our major parties is essentially just unapologetically rich people with large companies fist deep in them. They're also the cause of our housing bubble.
Steven Nguyen (23 days ago)
Do I smell some jealous foreigners in the comments lol.
jason prevo (23 days ago)
Another reason Australia has had strong growth is because they have a high minimum wage and universal healthcare allowing their citizens to spend more on good and services.. but you left that part out...
Patrick Arrow (22 days ago)
Not privatising everything is always good. Having (comparatively to the US) stronger unions and industry watch dogs helps too :D
Dan smith (23 days ago)
Australia's next biggest industries after mining are coffee shops and servos, one on every dam corner.
panik805 (23 days ago)
Oi!
Speed _ (23 days ago)
If they were in the northern hemisphere their economy would be terrible because they are upside down
Luke Riftwalker (23 days ago)
Timor Leste.
chief aussie (23 days ago)
6 days ago a loaf of bread cost $1.10 and now a loaf of bread cost $1.25
mooresly400 (23 days ago)
Counting chickens much?
William Ross-Hughes (24 days ago)
Ha so many salty yanks
TheSinglePlayer (24 days ago)
It always starts with geography.
Zamasu (24 days ago)
Australia's housing is dropping rapidly after bubble-like gains and inflation numbers below the 2-3% band are a symptom of a potential problem.
Adrian Jeffery (24 days ago)
The more Australia adapts constantly to change, is prepared to keep a keen view of the world stage and act quickly and whether popular or not keeps tabs on who migrates here and the number.....yeah...the ‘luckier’ it gets !!
David Vander Ven (24 days ago)
Pretty well, pre 08, yeah but post, not so much...
Arucane (24 days ago)
Um.. we are practically I one right now. Not officially but everything is declaring bankruptcy and trends expect it to be declared in coming months
txuai (24 days ago)
At least we don’t have AR-15’s
joelabo (24 days ago)
You're joking, right?
VHS Projekt BLUE (24 days ago)
immigration to sustain economical growth = future economical suicide
Ryan GD (24 days ago)
Paul Keating
TheFluffyDuck (25 days ago)
And you have labor to thank for all of it
Arc Light (25 days ago)
I saw photos of a red back spider killing & eating a brown snake today.
Isabella - (25 days ago)
Nah, it's because the centerlinkers and pensioners are consistently regurgitating money back into the economy. It's a constant cycle.
Haruhi Suzumiya (10 days ago)
Clearly a wining strategy
ex0duzz (25 days ago)
I'm Aussie. One answer. China. If it wasn't for them, we would have suffered in 2008 GFC but they bailed us out with their imports of our natural minerals
waga (25 days ago)
ok but why do all adult american women sound like they're 50 year old pack a day smokers or 10 year olds?
ZerOne (25 days ago)
Coins from Ukraine(UAH) at 1:36. Funny to see them here:)
Hackuna MyTatas (25 days ago)
no mention of the home price slide?
SJ 16 (25 days ago)
"Well run central bank"
S S (26 days ago)
The "lucky country" saying is ironic
AussieMoneyMan (26 days ago)
Up the Aussies
Simone Taddia (26 days ago)
But the crisis is coming because of the market of the buildings and houses. It's raising a huge bubble.
steven gould (26 days ago)
We really are the lucky country. Especially compared to USA. Social security Medicare University hecs Superannuation Better democratic system No guns mean less death rate. Government debt is nothing compared to USA. There govt is in ssssssooooo much debt that there economy is screwed in the future. Low unemployment rate. Natural resources Lower homeless rate than USA