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I thought it would be a minor crisis, but looks like it's really going to be some kind of full-scale recession worldwide...

Anyway, I'm glad I'll pass away as a citizen of Australia. Whatever happens.

Hope my Victorian friend won't suffer from the economic downturn.
Budget will be 'forced into deficit'

Article from: Agence France-Presse
PLUNGING demand for mining resources amid the global economic crisis will force Australia's once-robust budget surplus into deficit, Treasurer Wayne Swan admitted for the first time Sunday.

"Company taxation could be down as much as $50 billion over four years as a consequence of the global recession,'' Swan said.

"Of course what that means is -- because of the unwinding of China, the global recession -- it will be inevitable that Australia has a temporary budget deficit,'' he told Channel Nine television.

Demand in China and other Asian countries for Australian resources such as coal and iron ore has driven the economy for years, but exports have been hit hard by fading growth in major trading partners.

The surplus of $21.7 billion forecast in May's budget was slashed in November by three-quarters to 5.4 billion as the government warned the crisis would cut tax receipts, growth and jobs.

But the acknowledgement that even that will disappear follows Prime Minister Kevin Rudd's announcement Saturday that the International Monetary Fund (IMF) had predicted the country could go into recession this year.

The government is widely expected to announce further measures to stimulate the economy after a 10.4 billion dollar pump-priming exercise in December aimed at getting consumers to spend.
Swan would not be drawn on speculation that the measures will include tax cuts.

"What we are doing right now is looking at all options, given the substantial deterioration that has occurred... and the grim outlook that now comes out of bodies like the IMF,'' he said.

Incentives for business investment were always important but "the most important thing for the government to do to stimulate the economy is to stimulate demand so that business actually has some customers,'' Swan said.

The central bank is also expected to act to stimulate the economy by announcing a further cut in interest rates after its monthly board meeting on Tuesday.

Economists are predicting a cut of as much as 100 basis points, to 3.25 percent.,25197,24992224-601,00.html

Australia in recession:

THE global financial crisis has dragged Australia into recession with its economy forecast to contract by 0.2pc this year, according to the International Monetary Fund.

The unpublished IMF forecasts for Australia suggest that the recession will be drawn out, with economic growth predicted to recover by a weak 1.75 pc in 2010.

The Australian revealed last week that the IMF was due to revise down its 1.8 pc forecast for Australian gross domestic product growth in 2009 to close to zero.

Confirmation that the economy will go backwards this year suggests unemployment could rise steeply.

It will put pressure on the Reserve Bank to cut official interest rates by another 100 basis points on Tuesday.

Australia has been one of the last developed countries to slip into recession, in part because of the lingering boost from China's boom.

But this is now coming to an end as China has also been dragged into the global economic downturn.

The IMF this week again sharply cut its forecast for global economic growth in line with the deepening of the international financial and banking crisis and a collapse in consumer spending around the world.

The Washington based IMF said the world economy would grow a mere 0.5pc this year, including a bracing 2pc contraction for developed nations.

Australia's forecast -0.2pc growth this year is not as dire as the US (-1.6pc), Europe (-2pc), the UK (-2.8 pc) and Japan (-2.6pc).,28124,24989652-36418,00.html

Keep well anyway, Land Down Under.


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Alex Atkinson

December 2016

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