Not all doom and gloom says treasurer

Acting Prime Minister Julia Gillard is urging employers to use wage restraint as the economy slows. While Treasurer Wayne Swan has stated that Australia will survive the world financial crisis and be more prosperous than before.

Prime Minister Kevin Rudd will attend the G20 economic summit in London this week where Mr. Swan will join him. The treasurer has stated that there are no quick fixes to the global recession, but with the right action globally and here at home, we should come through this even stronger.

Julia Gillard has asked the Australian Fair Pay Commission to consider job losses rather than pay rises before it makes a decision on the minimum wage, due in July. Ms. Gillard who is also the employment minister, told ABC TV that in a slowing economy there is more reason to be concerned about connection between wages and employment. That point has been put before the Fair Pay Commission.

The ACTU has requested a $21 per week increase in the minimum wage, dismissing the argument-linking wage rises to higher unemployment.
ACTU secretary Jeff Lawrence has said that there is no credible evidence that a moderate pay rise to minimum wages will harm unemployment or inflation.

Minister Lindsay Tanner has admitted that the nation would not be able to assess the effectiveness of the fiscal stimulus programs worth $52 billion. Mr. Tanner told Sky News that there was no doubt that the stimulus packages are having an impact on the economy and that had they not taken those steps, then the economic situation would be far worse than it currently is.

Tony Abbott has however stated that he thinks big-spending stimulus programs are useless. Mr. Abbott told Channel Ten that you would never be able to spend your way out of a recession.

Although the Federal Governments $8.7 billion pre-Christmas handout from the stimulus package, helped New Year retail sales, experts are not expecting the magic to last. Economists have predicted that when retail trade figures for February, are released on April 1st they will show a half a percentage point drop as consumers have saved their government cheques rather than going on a shopping spree.

Figures that were released last week have shown that 42,000 Australians have taken advantage of the government's enhanced first homebuyers scheme between October and February. The Government has not yet indicated whether the subsidy of $21,000 for new homes will be extended past the expiry date of June 30.

Published on March 3-th, 2009 in Financial Planning
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.