It happened once under Peter Costello, twice on Wayne Swan’s watch, but for all his gaffe-prone time as treasurer, never to Joe Hockey.
Nor did it happen during Chris Bowen’s 83-day tenure.
But Scott Morrison has joined an elusive club of treasurers who have presided over a negative quarter of economic growth.
The shock 0.5 per cent growth contraction in the September quarter national accounts, released this week, was the first decline since March 2011.
Back then the economy was buffeted by a series of natural disasters – Cyclone Yasi and the Queensland floods, along with the trade disruption from earthquakes in neighbouring New Zealand and Japan, which is Australia’s second-largest trading partner.
The September quarter decline, which shrank the annual rate to 1.8 per cent from 3.1 per cent as of June, was the largest since the 2008-09 global financial crisis.
The GFC caused the deepest world recession since the Great Depression, an event Australia largely avoided bar one negative quarter in late 2008.
Costello’s moment came after the introduction of the GST in 2000, which nearly tipped the economy into the recession. Records show there was a flat result in September quarter 2000 followed by a 0.3 per cent decline in the following three months.
Two consecutive quarters of negative growth constitute a technical recession, which, remarkably, Australia has not suffered for more than a quarter of a century.
At this stage, economists are reasonably confident the December quarter national accounts won’t be another minus outcome, believing the economy was hit by a series of one-offs and will quickly bounce back.
Housing construction was hit by adverse weather and household spending was subdued, possibly hit by the uncertainty of a series of unsettling political events – Brexit, the run-up to the US presidential election and Australia’s own surprisingly tight election, which followed an eight-week campaign.
But the standout was the 12th consecutive quarterly decline in business investment – the remnants of the end of the mining investment boom.
Now everyone is talking “wake-up call”, although it’s more like buck-passing.
Business says the national accounts shock is a wake-up call for politicians, the government says it’s a wake-call for Labor to get on board with its economic plan, while the opposition says it’s a wake-up call for the coalition to ditch its $50 billion of unfunded company tax cuts.
Macquarie Research economist James McIntyre is concerned the government’s focus remains on budget repair in a bid to protect the nation’s triple-A rating, rather than the need to support demand within the economy.
“The longer fiscal policy continues to exert a contractionary impact on a weak domestic economy, the more work will be required of monetary policy,” McIntyre says.
He expects the Reserve Bank will need to cut the cash rate to 1.25 per cent from 1.5 per cent when it holds its next board meeting in February.
That is not the general view of financial markets, particularly as governor Philip Lowe this week pre-empted the GDP fall at the final board meeting of the year, which was the day before the national accounts.
Leaving the cash rate unchanged, Lowe had anticipated some slowing in economic growth by year’s end “before it picks up again”, pointing to a rise in exports as completed resource projects come online.
What Morrison won’t be doing is going on a cash splash, filling people’s pockets with money to spend willy-nilly, which was Swan’s response to the onslaught of the GFC.
“That’s what the Labor party did. They gave money to dead people and thought that was going to grow the economy. That was a nonsense,” Morrison said, referring to the accidental payment of stimulus cash payments to the deceased.
Still, Swan was named finance minister of the year by banking magazine Euromoney in 2011 for his efforts in keeping the Australian economy growing during the GFC, when most other countries fell by the wayside.
Only former prime minister and treasurer Paul Keating can boast such an accolade, even though he presided over the recession we had to have in the early 1990s.