National accounts figures, released by the Australian Bureau of Statistics on March 4, showed that the Australian economy contracted by 0.5% in the three months to December, despite the federal government's $10.6 billion stimulus package, which was paid out to pensioners and families before Christmas.
This follows on from the tiny 0.1% growth reported in the September quarter. Many economists are claiming that the economy is in recession.
Stephen Roberts, the chief economist at the global financial services group, Nomura, estimated that unemployment will reach 8% by the middle of 2010, according to the March 6 Australian Financial Review.
Kieran Davies, chief economist of ABN Amro, told the AFR that he expects growth to contract by 1.5% during 2009, "pushing the unemployment rate closer to 8% by the end of the year".
The response from the federal government has been inadequate and populist.
In a calculated move designed to appear to be easing pressure on unemployment, federal immigration minister Chris Evans has "flagged" cuts in immigration in the May budget, according to the AFR.
However, numerous studies have shown that migrants (particularly skilled migration) add more to economic life (to say nothing about cultural life) than they take, by increasing demand for housing, transport, education and in other areas. A cut in immigration risks further deflating an already slowing economy.
The federal government is also under pressure from business to rein in spending in its May budget. Already, ALP promises made to introduce paid maternity leave are now under threat.
Big business wants government to cut even further. The key pressure points are industrial relations and climate change.
Australian Industry Group CEO Heather Ridout has called for a two-year delay in implementing the Carbon Pollution Reduction Scheme.
Business calls to even delay Labor's minimal changes to Howard's Work Choices laws is also growing.
Big business is unanimous that it should be working people who pay for the crisis. However, there is an alternative.
Government could spend big on much-needed infrastructure, to assist the transition of the economy away from fossil fuels dependency and towards environmental sustainability.
Funding the complete overhaul of public transport, for instance, in all major cities would be a huge boost to the economy and employ tens of thousands.
Investment in environmentally sustainable power generation would have a similar effect. Both of these measures could be funded through the spending of the Future Fund and the running of a larger than anticipated budget deficit.
Making these decisions, however, would require a government committed to the interests of human need and not corporate greed. That, we do not yet have.