{"id":650650,"date":"2026-05-05T07:13:21","date_gmt":"2026-05-05T07:13:21","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/650650\/"},"modified":"2026-05-05T07:13:21","modified_gmt":"2026-05-05T07:13:21","slug":"victorians-brace-for-a-long-dark-recession","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/650650\/","title":{"rendered":"Victorians brace for a long, dark recession"},"content":{"rendered":"<p>The <a href=\"https:\/\/www.macrobusiness.com.au\/2025\/12\/victorias-economy-is-a-lead-weight-on-australia\/\" rel=\"nofollow noopener\" target=\"_blank\">latest state accounts<\/a> from the Australian Bureau of Statistics (ABS)\u00a0show that Victoria\u2019s per capita gross state product (GSP) declined by 0.8% in 2024-25 and had risen by only 10.0% since the Global Financial Crisis (GFC) in 2008.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/05\/Victorian-GSP.png\" width=\"627\" height=\"434\" alt=\"Victorian GSP\"\/><\/p>\n<p>In comparison, the nation as a whole recorded a 0.3% decline in per capita GDP in 2024-25 and a 14.3% increase since 2008.<\/p>\n<p>Victoria has also recorded the nation\u2019s softest growth in gross state income per capita since the GFC:<\/p>\n<p>Advertisement<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/05\/Victorian-gross-state-income-since-GFC.png\" decoding=\"async\" loading=\"lazy\"\/><\/p>\n<p>Victoria\u2019s real gross state income was the third lowest in the nation in 2024-25, ahead of only South Australia and Tasmania:<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/05\/Victorian-gross-state-income-per-capita-1.png\" decoding=\"async\" loading=\"lazy\"\/><\/p>\n<p>Advertisement<\/p>\n<p>In 2024-25, Victoria\u2019s gross household disposable income per capita ranked second lowest in Australia, only surpassing South Australia.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/05\/Victorian-gross-household-income.png\" decoding=\"async\" loading=\"lazy\"\/><\/p>\n<p>A key factor behind Victoria\u2019s economic decline is the state\u2019s deplorable productivity growth, which\u00a0averaged just 0.7% per year from 2005 to 2025, well below WA (3.0%), Qld (1.5%), and NSW (1.3%):<\/p>\n<p>Advertisement<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/05\/Labour-productivity-by-state.png\" decoding=\"async\" loading=\"lazy\"\/><\/p>\n<p>A shift towards labour\u2011intensive, low\u2011productivity sectors (e.g., hospitality, education, administration services, and healthcare) dragged down aggregate productivity.<\/p>\n<p>Victoria\u2019s weak productivity growth has contributed to soft wage growth, soft household income growth, and weaker consumption.<\/p>\n<p>Advertisement<\/p>\n<p>As a share of GSP, Victorians also stand out as having a higher tax burden than any other Australian state:<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/05\/Tax-revenue-by-state.png\" width=\"516\" height=\"495\" decoding=\"async\" loading=\"lazy\" alt=\"Tax burden\"\/><\/p>\n<p>Unfortunately, Victoria\u2019s economic underperformance is forecast to continue.<\/p>\n<p>Advertisement<\/p>\n<p>A <a href=\"https:\/\/library.westpaciq.com.au\/content\/dam\/public\/westpaciq\/secure\/economics\/documents\/aus\/2026\/05\/er20260504BullStateUpdate.pdf\" rel=\"nofollow noopener\" target=\"_blank\">new report<\/a> from Westpac forecasts that Victoria\u2019s consumption per capita will decline by around 3.5% cumulatively over the five years to 2027-28, one of the largest and longest-lasting\u00a0contractions on record:<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/05\/Victorian-household-consumption-per-capita.png\" width=\"660\" height=\"471\" decoding=\"async\" loading=\"lazy\" alt=\"Victorian household consumption per capita\"\/><\/p>\n<p>In fact, Victoria stands out as the only state where consumption per capita is forecast by Westpac to fall below FY2019 levels by FY2028.<\/p>\n<p>Victorian GSP per capita is also forecast by Westpac to contract over the period to 2027-28:<\/p>\n<p>Advertisement<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/05\/Victorian-GSP-per-capita.png\" width=\"660\" height=\"466\" decoding=\"async\" loading=\"lazy\" alt=\"Victorian GSP per capita\"\/><\/p>\n<p>\u201cThe post COVID cost of living squeeze, now compounded by the recent spike in global energy prices, is delivering one of the largest and most prolonged contractions on record, extending back to the early 1990s\u201d, Westpac wrote.<\/p>\n<p>The takeaway:<\/p>\n<p>Advertisement<\/p>\n<p>Victoria\u2019s economic malaise is structural, rooted in two decades of weak productivity, soft income growth, and a heavy tax burden.<\/p>\n<p>The decline has been building for two decades, and the pandemic merely amplified these weaknesses.<\/p>\n","protected":false},"excerpt":{"rendered":"The latest state accounts from the Australian Bureau of Statistics (ABS)\u00a0show that Victoria\u2019s per capita gross state product&hellip;\n","protected":false},"author":2,"featured_media":650651,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-650650","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/650650","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=650650"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/650650\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/650651"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=650650"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=650650"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=650650"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}