Monday, 20 October 2008

Financial crisis will hurt jobs, Swan warns

Job cuts inevitable...Wayne Swan.

Job losses across Australia will be inevitable as the effects of the global financial crisis hit Australian businesses, Treasurer Wayne Swan says.

Economists have predicted national growth could slow to 1.25 per cent next year, resulting in the loss off an estimated 200,000 jobs.

Mr Swan refused to speculate on the extent of job losses but conceded the national unemployment rate would rise.

"There is no doubt that the global financial crisis will have an impact on employment growth in Australia and there is no doubt that we will see over time unemployment move up," he told reporters in Brisbane.

"There is a very big challenge coming Australia's way from the global financial crisis ... that is why we have moved with such speed to boost and strengthen our economy immediately."

The Treasurer said the Government's growth forecasts would be released next month as part of its mid-year economic review.

Future Fund slightly lower on financial crisis fears

The Federal Government's Future Fund has taken a small hit from the global financial crisis.

The fund had a positive return last financial year but in the three months to September it has been slightly negative.

Its overall value is now $63.4 billion, which is fractionally lower than when it was set up more than a year ago.

But Finance Minister Lindsay Tanner says the fund is in good shape and has maintained its value in extraordinary times.

"This is a very significant and positive result... in the circumstances that the Future Fund has been dealing with, given the huge drops in share prices - not only in Australian markets but also internationally and there is every hope, of course, that these share price reductions will be corrected in the medium term," he said.


More families needing emergency support
The welfare group Anglicare says it is noticing a growing need among working families for emergency relief and housing support.

Freefall Friday: $84b - worst day in 21 years

Australian shares had their worst day since the crash of 1987, losing more than 8%, as mounting recession fears sent equity markets tumbling around the world.

States 'dreaming' over extra funding

Prime Minister Kevin Rudd says he will not bow to pressure from states to provide billions of dollars in extra funding.

Economists predict unemployment rate rise
The unemployment rate has jumped from 4.1 per cent to 4.3 per cent.

Market plunges 5pc, dollar crashes
The Australian share market plunged 5 per cent today, as the dollar hit a new five-year low. Fear of a global recession has seized markets, with big falls across the major indices overnight.

Associate Professor Steven Keen.
Steven Keen has come increasingly to prominence over the past couple of years specialising in the economics of Australia's spiralling household debt burden.

PROFESSOR STEVEN KEEN: Best case scenario is a recession more severe than 1990 and lasting one and a half times as long.

Worst case is something up to the level of the Great Depression which was 20 per cent unemployment and lasting up to a decade.

$50b Aussie wipe-out
Australian stocks wiped more than $50 billion off the value of the market today after the US House of Representatives rejected a $US700 billion ($860 billion) plan to rescue the financial system.

Upwardly immobile: mortgage stress bites
Reserve Bank statistics do not begin to tell the real story of housing stress in Sydney's western suburbs, according to financial counsellor Mike Young.

Households give up three years of gains
AUSTRALIAN households have been hit so hard this year that their financial gains of the past three years have been wiped out, a Reserve Bank report has found.

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