Recent economic headlines celebrating the ACT's strong economic performance may be misleading, with deeper analysis revealing worrying signs of a technical recession in Australia's capital territory.
Government Spending Masks Private Sector Weakness
While official figures showed ACT final demand grew by a respectable 4.1 percent in 2024-25, the breakdown tells a different story. Commonwealth government expenditure surged by 7.3 percent and ACT government spending increased by 2.8 percent, but the private sector including households and businesses managed only 0.5 percent growth.
This anaemic private sector performance falls substantially below population growth rates, indicating the ACT is clearly experiencing a per capita recession. The situation becomes even more stark when examining the composition of economic growth.
Concerning Economic Imbalances
Of the $3.3 billion growth in ACT final demand during 2024-25, a staggering 95 percent came from combined government expenditure. This means only one in every twenty dollars of extra expenditure originated from the private sector.
The difference between ACT final demand and Gross State Product reveals another worrying trend - a large trade deficit that grew by $1.3 billion (5.4 percent) in 2024-25. Even when this deficit is proportionally distributed, the data suggests the real economy centered on the private sector is in serious recession territory.
Broader Community Concerns
The economic analysis forms part of broader community concerns expressed in letters to the editor. Multiple correspondents raised issues about police treatment of Indigenous youth, with one incident involving a 17-year-old Aboriginal boy being confronted by police with guns drawn on a Canberra bus.
Climate policy also featured prominently in community feedback, with several writers criticising the federal Coalition's approach to net zero targets and expressing concern about Australia's direction on environmental issues.
The correspondence period also saw discussion of international affairs, including Trump's peace plan for Gaza and concerns about ongoing violence in the region despite ceasefire discussions.
As the economic data suggests, behind the positive headlines lies a more complex reality for Canberra's economy, with serious questions about the sustainability of growth driven predominantly by government spending rather than private sector vitality.
