Oh those famous words uttered by Prime Minister Keating in 1991 as Australia entered a deep recession in 1991 – preceded by the crash of the global stock market in 1987 and interest rates at an historic high of 17.5% – that’s right, it was like buying a house on a credit card – only difference was, the loan was secured against the property.
It’s close to 30 years since Australia last had a recession.
Most people in the workforce today were too young to have a job back then and anyone under 35 is probably too young to remember it.
But among many of us old enough to have lived through the recession of the early 1990s, the fallout is etched in memory.
The recession was severe — the worst since the Great Depression of the 1930s — and vast numbers of people lost their jobs or couldn’t break into the workforce.
The slowdown began in the first half of 1990; the economy actually started to shrink in the second half of that year.
Officially, it was over after about a year later, with the economy beginning to grow again in the September quarter of 1991. But it didn’t feel like it.
The unemployment rate continued to rise even after a slow and tentative recovery began, peaking just shy of 11 per cent in 1992.
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It had a 6 in front of it before the downturn began but it took nearly a decade for the unemployment rate to get back to those levels.
For 18 to 22-year-olds, unemployment peaked at 17 per cent, as school leavers and graduates had their career ambitions and dreams dashed or delayed by a lack of work and ended up on “the dole”, as the unemployment benefit was called.
For older workers and migrant workers, the toll was worse.
In their report Loyalty Is A One Way Street, Ian Watson and Toni O’Loughlin documented the impact on older blue collar workers, disproportionately drawn from the ranks of immigrants, who lost their jobs and became long-term unemployed as the recession accelerated the de-industrialisation of the Australian economy.
Many never worked again.
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For a property-price obsessed nation, it’s worth noting that house prices crashed, too, through a combination of high interest rates in the run-up to the recession followed by large numbers of people losing their jobs.
How does the current downturn — induced by the fallout of coronavirus and the measures put in place to control it — compare to this last, deep recession?