Australia and New Zealand are experiencing protracted recessions.
However, New Zealand’s recession is far deeper than Australia’s, as illustrated below by Justin Fabo from Antipodean Macro.
New Zealand’s unemployment rate is also significantly higher than Australia’s.
The differing outcomes between the two nations are explained by the exceptional growth in the non-market (government-funded) sector in Australia.
As illustrated by independent economist Tarric Brooker, government spending has accounted for 70% of total Australian GDP growth since the Albanese government came to office in Q2 2022.
Source: Tarric Brooker
Much of this growth has been driven by the National Disability Insurance Scheme (NDIS).
The exceptional expansion of Australia’s non-market economy is illustrated clearly below by Brooker, showing how growth in Australian non-market jobs has dwarfed other advanced nations.
Source: Tarric Brooker
The contrast between Australia and New Zealand is especially stark.
Source: Tarric Brooker
Source: Tarric Brooker
Australians would be experiencing a similar recession to New Zealand if not for the rapid expansion of the NDIS.
