Although the national accounts figures this week showing a contraction in the economy for the December quarter were a low point in the Howard Government's stewardship of the economy, probably a worse time occurred back in November. In other words, just as the economy was moving backwards, the government was beating its breast and producing forecasts even more bullish than those contained in the budget. But, as this week's figures showed, annual growth in GDP is now running at only about half the 4 per cent projection. A number of factors were behind the poor economic news. Our trading partners are experiencing a slowdown.
Oil prices are at punishingly high levels.
International confidence in the Australian economy, expressed through the value of our dollar, has been falling. The technology boom has well and truly ended. These are, by and large, external factors. But domestic factors have played a significant part, too. A combination of two mid-2000 interest rate rises and the introduction of the new tax system in July appear to have mugged the Australian economy.