History of Melbourne - 1989 Financial Crash

1989 Financial Crash

These trends, along with cyclical recession and poor governance contributed to a financial crash in 1989, leading to the forced sale of one of Victoria's best-known symbols, the State Bank of Victoria. This was followed by a deep recession. Melbourne's population growth slowed during the early 1990s as employment contracted, with a rise in migration to other states such as Queensland.

In turn this recession contributed to the fall of Joan Kirner's Labor government and the election in 1992 of a radical free-market Liberal government under Jeff Kennett. Kennett's team restored Victoria's finances by making sweeping cuts to public expenditure, closing many schools, privatising the tramways and electricity production, and reducing the size of the public service. These reforms came at a high social cost, but ultimately restored confidence in Melbourne's economy and led to a resumption of growth. By 1999 Kennett was voted out, but key landmarks that his government commissioned, such as the Crown Casino, the Melbourne Exhibition and Convention Centre and the new Melbourne Museum, remain.