When Governor Stephens speaks of a "V" shaped recovery, he is correct - so far. Australia recorded just one quarter of negative growth during the economic crisis. On the graph it is a deep V. But there's no guarantee it will stay that shape.
In the March quarter economic growth was positive - we were at the top-right tip of the V. But the unsettling truth is that were it not for an extraordinary 11.6 per cent jump in government stimulus construction spending that quarter growth would have been negative. We would have been looking at a W.
And although not many are game to say it out loud, it gets worse. Stimulus programs are finishing. Treasury says it will subtract one percentage point from economic growth this year. And the troubles overseas are just beginning to touch our shores.
We are at the top of a V, for now.
Published in today's SMH
. Removing stimulus now would "stall the economy"
. Mining export earnings are beginning to roll (whatever the industry says)
. We're back, so spending's capped. Let's hope we really are.