Fed: Costello warns need to use all economic levers

AAP General News (Australia)
12-03-2001
Fed: Costello warns need to use all economic levers

By Shane Wright

CANBERRA, Dec 3 AAP - Treasurer Peter Costello today warned he would have to pull all
the economic levers at his disposal to ensure Australia avoided the recession gripping
the rest of the world.

Mr Costello said he would have to use budget, taxation and monetary policy plus more
structural reform to keep the Australian economy strong.

He made the comments as a new survey showed unemployed people less confident about
finding a new job than they were earlier in the year.

Another survey found jobs advertised on the internet down 14 per cent in November because
of the economic slowdown now hitting the economy.

The Reserve Bank board meets on Tuesday and is expected to cut interest rates by at
least 0.25 per cent because of the gloomy economic news coming from overseas.

Mr Costello said the United States and Japan were in recession, while the European
economy had stopped and South East Asia was going backwards.

He said despite Australia outperforming all these nations, the government had to look
at all policy avenues to keep the economy from falling into the world recession.

"Well, it is going to take a combination of budget policy, monetary policy, structural
reform, taxation policy," he told Channel Nine.

"Now we are beating the world but we will not be immune from it and we have just got
to make sure that we come through this period in the best condition possible."

Mr Costello refused to be drawn on any change in Budget forecasts, only saying that
since the last forecasts the world economy had slipped even further.

The Job Futures/Saulwick survey of 1,000 workers found the proportion who said they
were not confident of finding a job within six months had risen from 23 per cent to 31
per cent.

"These results suggest that there is greater uncertainty and perhaps even a degree
of pessimism about the employment outlook among people looking for work," Job Futures
chief executive Robert Tickner said in a statement.

The Olivier Internet Job Index found there were 9,500 fewer jobs advertised in November
than in October.

The 14 per cent decline was the biggest monthly drop for the index, which began collecting
information in December 1999, and follows a nine per cent slump over October.

"It is clear the job market in Australia is shot to pieces, despite some recent positive
economic data," said Robert Olivier, director of the Olivier Recruitment Group.

Meanwhile, a report on the economy's performance for the next 15 years predicts Australia
will go through an investment led boom-bust cycle.

The BIS Shrapnel Long Term Forecasts 2001/2016 report said overseas growth would bounce
back in the next 18 months, and help lift the Australian economy.

Economic growth over the two years following would come from an upswing in property
markets and a subsequent boom in construction leading to GDP peaking at five per cent
over the 2004/05 period, the report said.

AAP sw/ldj/br,

KEYWORD: ECONOMY NIGHTLEAD

2001 AAP Information Services Pty Limited (AAP) or its Licensors.