I know I’ve said this before but after seeing yesterday’s numbers I have to say it again — this is the craziest recession ever, with our economy shrinking by 7% in the June quarter. I would’ve preferred a number around 5% but it is what it is. It’s what happens when governments close down national and state economies.

But it’s still a crazy and unique recession, with the Dow Jones Index up 424 points overnight and only 441 points off its all-time high of 29,551 achieved before the Coronavirus crash!

Keeping the crazy theme going, I interviewed Gerry Harvey yesterday. Gerry said it was Harvey Norman’s best profit ever, and sales for July and August are still looking great and very un-recession like.

He also slammed those market experts, who give his company’s share price the thumbs down, as pedlars of “bullshit”. His share price is up a whopping 80% since March 23 this year! In a recession for Pete’s sake! Did I say this was a crazy recession? (by the way, who was Pete from that old saying?)

We’ve contracted by 7% in the June quarter. This was a bad number. I argued 5% would’ve been good and 6% would have been OK. However 7% was bad. But compared to the rest of the world, it was the 4^th lowest contraction globally. Only South Korea, Finland, and Hong Kong did better.

The US shrank by about 9%, China 10%, Germany 11% and the UK 20%.

The quarter we’re in now (i.e. the September quarter) will be better. It would have been even better if Melbourne wasn’t in lockdown. But the table below does show how much better off we are than our friends in comparable economies.

The only good thing about this bad number (which really applies to what happened across April, June and July, when most of the country was locked down and restricted) is that it will force the Treasurer, Josh Frydenberg to embrace tax cuts in his delayed Budget out on October 6.

Business knows they’re needed, especially with JobKeeper payments to be trimmed from $1,500 to $1,200 a fortnight as from October. And businesses doing well (turnover-wise) will lose access to this wage subsidy for their workers.

Also, the tax rebates from the ATO on the tax employers pay out of the wages they pay to staff, will no longer be a help. Recall, eligible employers who withhold tax to the ATO on their employees’ salary and wages received a payment equal to 100% of the amount withheld, up to a maximum payment of $50,000.

And other eligible employers who pay salary and wages will receive a minimum payment of $10,000, even if they’re not required to withhold tax! This help to cashflow effectively applied for the June and September quarters. Many businesses received a minimum effective tax rebate of $20,000, while many could have received a maximum of $100,000!

That’s why more tax relief out of the Budget makes sense and explains why business groups are calling for it. This is especially so, when the tax cuts are already earmarked for 2022, which hardly makes it a crazy request, given the 7% contraction of the economy.

And on the subject of crazy, I suspect our bank bosses will need a decent nudge from the Treasurer after it was revealed that the RBA offered them cheap money ($200 billion to be precise) to lend to SMEs. However, the central bank had already stumped up $90 billion to help small businesses, when the COVID-19 rescue plan was hatched, but to date, the tightwad banks have only lent $56 billion! And I know lots of small businesses and finance brokers who are complaining about this typical bank behaviour. Can leopards change their spots or do they just try to cover them up?

Josh might have to have a word with our bank bosses and it shouldn’t be a proverbial quiet word. Australia is currently giving the banks a second chance after they hardly covered themselves in glory in the Hayne Royal Commission but if our economy’s recovery is held back by share-price worrying bankers, people like me won’t stop reminding them. You try to forgive them but they can’t break their entrenched ways.

The irony is that the faster our economy grows, the faster bank profits will rebound, which ultimately drives their share prices. When are these bankers going to learn?