Australia economy braces for headwinds unlike any it has known

Australia's record of an unbroken 100 quarters of economic growth is certainly reason for cheer.

The economy grew 3.3 per cent over the last financial year ended June 30. The last recession ended in June 1991 when the jobless rate stood at 11 per cent. Since then, it has been a growth story all the way. Australia even managed to dodge hard times at the height of the 2008 Great Financial Crisis. The national jobless rate stands at 5.7 per cent now. Both the government and the opposition are claiming credit for the happy state of affairs. They should be warned, however - the next few years may prove to be more difficult than the past 25 years.

It should be noted, for instance, that the Australian economy grew only 0.5 per cent in the June quarter this year, slowing from a revised-down one per cent growth in the previous quarter. This was the weakest expansion since the second quarter of 2015. More significantly, last year's 3.3 per cent growth was helped along by extra government spending ahead of a general election. Public sector consumption rose 1.5 per cent and government investment went up by a huge 15 per cent. State governments in Sydney and Melbourne maintained growth with their own infrastructure spending.