Victoria had recession in past two years
letters published in The Australian Financial Review, 2 December 2010
Michael Dwyer claims that Victoria has had a relatively high performing economy in recent years and notes that gross state product increased 2 per cent in 2009-10 (“Impressive figures but housing causes concern”, November 30).
However, he overlooks the fact that in real per capita terms this translated to a fall in each of the last two years, leaving the 2009-10 level only 2 per cent higher than in 2005-06.
In per capita terms the state that is usually portrayed as the dunce –NSW- actually performed better than Victoria over this period.
Analysis in per capita terms should be seen as relevant to assessing economic policies by governments, both state and federal.
The reality is that in the past two years Victorians experienced a recession and this is true even if real per capita income (which reflects the improvements in the terms of trade) is used.
Using that measure, incomes of Victorians were lower in 2009-10 than in 2007-08, as were incomes of Australians (on average).
It is truly remarkable how the media has swallowed claims by both the federal and Victorian governments that their economic policies prevented a recession.
The so-called stimuli policies did not work for individual Australians or those living in Victoria. Only individual Western Australians were the lucky ones – for reasons not connected with fiscal policies.
Des Moore
Director
Institute for Private Enterprise
South Yarra Vic