I always worry when I hear politicians or economists talk about how the economy needs to be administered some painful medicine. Inevitably it means people suffering for no good reason. Right now the medicine of interest rate rises is poisoning the economy as living standards collapse.

If ever there was an example of the disconnect between “the economy” and what people actually experience, it came with the release of the annual gross state product (GSP) figures, which measure state economies much like GDP measures Australia’s economy.

The news was announced by the Bureau of Statistics, which told us “gross state product rose in all states and territories”.

To be fair to the ABS, it was not spinning the numbers, just announcing the top line figure that every state and territory economy in 2023-24 was bigger than in 2023-23.

This is unsurprising. Unless something drastic occurs – such as a pandemic that shuts down the state – economies are supposed to get bigger each year.

The more pertinent fact was that each state economy grew more slowly in 2023-24 than it did in 2023-23: (I’ve excluded NT due to scale – you can see its graph here.)

If the graph does not display click here

And, overwhelmingly, the growth was due to population growth.

Once you take out the increase in population, nearly........

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