PM looks at backing property developers to save jobs

The Federal government is thinking of  supporting  commercial property developers  to save jobs.

The Finance Minister, Lindsay Tanner revealed this yesterday, after warning reporters that Australia faces the grim prospect of heavy job losses, as China’s economic growth slows.

Mr Tanner was blunt about the implications of that slow-down.

“Today’s growth figures from China are bad news for jobs in Australia and bad news for (Australia’s) economic growth,” he said.

Figures released earlier in the day had shown that China’s economic growth slowed to just 6.8 per cent  in the final quarter of last year from 9 per cent in the previous three months.

Senior Federal ministers had previously hoped that China would not be hit too hard, by the global economic crisis, saying booming  domestic demand in the Asian giant would probably take up any slack.

But the latest figures show that is not happening.

Mr Tanner said it is also  becoming clear that there might well be an interruption to normal roll-over finance, for major property developments, such as shopping centre construction.

He revealed, too, that the government has been holding private talks with Australia’s banks, both to gauge the extent of the  possible problem and to assess what might be done about it.

“The issue that is under contemplation is a very specific one and that relates to commercial property,” Mr Tanner said.

“These are all dimensions of what is a very complex problem and one which we are still considering…,” he added.

Mr Tanner said the government must first decide “whether or not we need to take any action.”

“But we would be absolutely derelict in failing to address the question,” he added.

“We have to deal with this issue.

“We have to engage with it,” he said.

Mr Tanner’s remarks, which go further than the broad, but obscure  hints  that Prime Minister, Kevin Rudd, and  his Treasurer, Wayne Swan, have given reflect a tough new pragmatism in the Federal government.

They also challenge popular perceptions of traditional Labor biases.

There would certainly have been mass protests from Labor supporters  if the Whitlam government, for example, had even thought of  supporting private property developers, who were then regarded, by most Labor people as class enemies.

But as the Communists used to say: “Circumstances determine everything.”

And the circumstances the government faces right now are very grim indeed.

Thousands of jobs are already being lost in the mining industry and many more – throughout the economy – are  in great peril.

The Federal government  intervened late last year to bolster credit in the car industry  after big international financiers withdrew from the country. That has already boosted local car sales.

Mr Tanner has now declared that the government will not stand idly by, in the weeks and months ahead, as thousands of commercial construction industry jobs are lost, because of an avoidable blip in that industry’s underlying finances.