Recession a heartbreaking blow: Morrison

Josh Frydenberg says the recession is more than a set of numbers, it's about Australians' lives.
Josh Frydenberg says the recession is more than a set of numbers, it's about Australians' lives.

Scott Morrison has lamented a heartbreaking blow to Australia after the economy shrank seven per cent in the June quarter, confirming the first recession in three decades.

The Australian Bureau of Statistics on Wednesday confirmed the largest quarterly contraction on record, driving home the hammer blow of the coronavirus crisis.

In the year to June, gross domestic product fell 6.3 per cent.

Two consecutive quarters of contraction in June and March, when gross domestic product fell 0.3 per cent, put Australia into technical recession.

Prime Minister Scott Morrison said it was a devastating day for Australia.

"Our Australian economy has been savaged by the COVID-19 global pandemic and recession," he told parliament on Wednesday.

"It is delivering an awful and heartbreaking blow to Australians and their families all around the country."

He cautioned against long-term reliance on support programs like wage subsidies and the increased dole, which will be scaled down from September.

"The path to recovery will not be paved with endless support of the government," the prime minister said.

Treasurer Josh Frydenberg said the September quarter figure is expected to be slightly negative or flat as it includes Melbourne's second lockdown.

"Behind these stories and these numbers are heartbreaking stories of hardship being felt by everyday Australians as they go about their daily lives," he told reporters in Canberra.

"Today we are reporting these numbers, but today everyday Australians are living them."

The government is pointing to JobMaker - a range of programs to boost skills, stimulate home building projects and encourage industrial relations flexibility.

It also brings forward spending on major infrastructure projects and $250 million for the arts industry.

But Labor and unions argue a more comprehensive jobs plan is needed to jump-start the ailing economy.

Shadow treasurer Jim Chalmers said it was a dark day.

"This Morrison-Frydenberg recession is deep and it's devastating for millions of Australians and their families," he told reporters in Canberra.

"We're in the teeth now of a full blown jobs crisis but the Morrison government still doesn't have a jobs plan to respond to it."

Business Council of Australia chief executive Jennifer Westacott said the figures showed the monumental recovery task ahead.

"We need a recovery plan that is driven by the private sector, focused on job creation and getting investment going again - and we don't have any time to waste," she said.

Australian Council of Trade Unions president Michele O'Neil said the government attacked Victoria for not producing a road map out of lockdown while lacking its own comprehensive jobs plan.

"These are the worst economic figures ever recorded, we are in an unprecedented economic and public health crisis, and yet the Morrison government has no plan for a way out," she said.

Victoria recorded six deaths and 90 new cases on Wednesday, up slightly from the previous day.

The national death toll is now 663.

Australian Associated Press