What the recession means for Queensland
THE Australian economy has collapsed a whopping 7 per cent, the worst drop on record and putting the country officially into recession for the first time in 29 years.
The drop in the June quarter is more than three times as bad as the previous record fall of 2 per cent in June 1974.
But as Queenslanders shut their wallets to travel, holidays, cafes and restaurants as pandemic lockdowns took place, they splashed out more on booze and home improvements.
While the amount the sunshine state spent on alcohol reached a record $1.2 billion for the three months ending in June, what we spent on sporting and cultural events dropped 46 per cent from the previous quarter.
Accommodation providers in the state were punished, with a 60 per cent drop in cash to just $257 million, while spending at cafes and restaurants halved from $3.1 billion to $1.5 billion.
Instead Queenslanders spent up big on household tools and furniture sales were also on the rise.
Construction, one of the key pillars of the state's economy, suffered a 7.1 per cent fall in demand.
There was an "unprecedented" almost 10 per cent dropped in hours worked nationally and only the $31 billion JobKeeper wage subsidies kept the fall in what Australians earned to 2.5 per cent.
The September quarter is also expected to be flat or slightly negative growth as well, brought down by the Melbourne lockdown, meaning the recession is staying for longer.
Treasurer Josh Frydenberg said the numbers showed that COVID-19 had "wreaked havoc on the economy and our lives like nothing we've experienced before".
"Behind these numbers are heartbreaking stories of hardship being felt by every day Australians going about their daily lives," he said.
"But there is hope and there is a road ahead.
"The road ahead will be long, the road ahead will be hard, the road ahead will be bumpy."
Opposition Treasury spokesman Jim Chalmers said it "beggars belief" that the worst recession since the Great Depression had not been enough for the government to "bring forward a proper jobs plan".
"In the middle of this jobs crisis, Scott Morrison and Josh Frydenberg have a plan to wind back JobKeeper, cut wages, cut super, freeze the pension, point the finger and shift the blame - but no plan for jobs," he said.
"Today's data shows that the virus has turbocharged long standing weaknesses in the economy under the Liberals and Nationals."
Commonwealth Bank senior economist Gareth Aird said that in a "bizarre" way Australia's economy had performed relatively well in the first half of 2020 despite the "headline grabbing" plunge which would "live long in the memory".
"Had it not been for the second outbreak in Victoria and subsequent lockdowns, the Australian economy would be on a well‑entrenched path to recovery and quarter two 2020 would be the low point for GDP," he said.
He predicted a further but much smaller contraction in GDP in the September quarter due to falling production and spending in Victoria.
Australian Council of Trade Unions President Michele O'Neil said the government had failed to provide a comprehensive plan to create jobs for "the millions of working people who will need them in the coming months and years".
"We need a comprehensive national economic reconstruction plan to create jobs and show Australian workers that there is a way out of this crisis."
Originally published as What the recession means for Queensland