Economics is often called “The Dismal Science”. In many ways it is also one of the most imperfect. General trends can be projected, but there are so many swings and roundabouts by which a country’s economy can be measured that its almost impossible to predict whether a recession curve will be “U” shaped, “V” shaped or “L” shaped.

Indeed, economics does not have the precision of mathematics because human sentiment plays a major role in the direction it takes. It stands to reason that Treasurer Josh Frydenberg would warn of a jobless blowout as this country heads towards recession for the first time in nearly three decades.

Standard and Poor’s has placed a “negative outlook” on our hard-won ‘Triple A’ credit rating and the economy is set to contract by almost 4 percent this calendar year.

As a result of the government’s massive stimulus package, Chris Richardson of Deloitte Access Economics estimates that the unemployment rate will peak at about 8 percent, saving half a million Australians from the dole queue. But his assumptions could be heroic given that during the last recession of 1990-1, unemployment increased by more than 80% going from 6.1 percent to 11.2 percent in just over a year.

That recession did not last long, however, unemployment has a long tail, and it took nearly a decade to get it back to 6.1 percent. The predicted recession has already been declared by the IMF to be the worst since the Great Depression of the 1930s.

Frank Carroll

In January 2013, the International Monetary Fund declared the Howard government to be the most ‘wasteful spending government in the history of Australia’. It has also been argued that his tax cuts and lavish handouts caused untold structural damage to the Australian economy.

Just before the election of 2007, the then ALP leader, Kevin Rudd pronounced that “this sort of reckless spending must stop!” He could not foresee that a year later the global financial crisis would require substantial spending to keep people in jobs. Although he was pilloried by the press and Opposition, Australia did not go into recession. Still, it was a close-run thing. Highly-respected economist Saul Eslake commented that if Rudd had spent too little it would have been far more damaging than spending too much. He argued that Labor got it right when it came to the big calls.

Now Scott Morrison has had to go against the grain of Liberal Party ideology. Smaller government and balanced budgets have had to be jettisoned as the country finds itself in crisis again, only this time facing something far worse. Like Mr Rudd he is generally making the right calls but this time the press and the opposition have been in lock-step.

Frank Carroll