Aus economy

Federal Treasurer Wayne Swan says he won't speculate on whether Australia will go into a recession, despite a new report saying Australia's budget is "buggered".The Access Economics report, to be released on Monday, warns Australia will go into recession this year as the economic boom unwinds.A blow out in the account deficit and a loss of 300,000 jobs is likely to be a result of the downturn, it says.The report demonstrates the difficult global conditions that Australia confronts, topped off with a shrinking economy in the US and slowing in economic growth in China, Treasurer Wayne Swan told ABC Radio on Monday.But when asked whether Australia would go into a deficit, he replied: "I certainly don't speculate about that."I mean every day will bring a new set of private sector forecasts and I don't intend to... respond to them on a daily basis."But I guess what this report does do is point to the impact of a global recession, and what it will mean for world growth."The government would respond "if necessary in a timely way", with a further stimulus package if it was needed, Mr Swan said.

More on this subject from an ABC report....
A key economic forecast says Australia will definitely fall into recession this year and has described the Federal Budget as being "buggered".The latest business outlook from Access Economics says that Australia's prosperity will unwind quickly because of the slowing Chinese economy and unemployment will be up to 7 per cent by next year.The report says global growth is slowing at a scary speed, and Australia's growth prospects are expected to follow the lead in similarly swift fashion.Chris Richardson from Access Economics says the implications for this year's Federal Budget are tough, and the Government faces some ugly policy choices."It doesn't however mean that the Government should stop doing what it's doing," Mr Richardson said.Federal Treasurer Wayne Swan told ABC Radio's AM program that budget revenues will be more seriously affected than first thought.He says the report confirms the very difficult global conditions faced by the Australian economy, but he would not speculate on a recession."Revenues will take a heavier hit than was thought at the end of last year, but we'll account for that in good time," he said"We face the prospect of the United States economy shrinking, and of course the prospect of China not growing anything like [what] was expected only a few months ago.
"There's no doubt that a slowing China will have a very substantial impact on countries in this region, and most particularly Australia."Both those events are deeply concerning for growth in this country and the impact in terms of revenue for the Budget and also the impact on employment."