Western Australia has joined the other AFL states in recession as Australia's annual growth rate slowed to 2.5 per cent in the March quarter – a quarter that could be a turning point for the economy.

Wednesday's national accounts confirmed that mining investment has handed over the baton of leading Australia's economic growth. But whoever has it is not running very hard.

Over the past six months, Australia's growth rate has slowed to an annualised 2.25 per cent, well below any estimate of trend growth. With the population growing by roughly 1.75 per cent, it implies little growth in living standards.

On the expenditure side, the main contributor to growth in the March quarter was the abrupt slump in imports of capital goods. By industry, our old friends in the finance sector enjoyed the biggest growth, as we saved more money for them to manage. And on the income side, the big contributor was the spike in minerals prices in the quarter, which saw a rebound in corporate profits.

None of those can be long-term drivers of growth. A substantial fall in the dollar, back into the range it inhabited between 1985 and 2005 (roughly between 50 and 90 US cents), is a precondition for Australia to make a successful baton change as mining investment fades. We're not there yet.