The GDP’s 3.4% growth in the December quarter only occurred because in the September quarter the economy shrank by the third-biggest amount ever
The Australian economy at the end of 2021 rebounded for one reason alone – people coming out of lockdowns in the late winter and spring period spent their money. But ironically this massive surge of growth from households comes at a time when workers are receiving a smaller share of the economy than ever before.
During the global financial crisis, then Treasury secretary Ken Henry famously advised the Rudd government that the best way to drive the recovery was “go early, go hard, go households”. The reason being that household spending makes up just over half of Australia’s economy and if people are spending money, then the economy will do well.
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