by Alan Thornhill
Your job – over the next year or so – may well depend on the Federal government’s stimulus package.
And there’s some good news.
Access Economics says the final – and most important – stage of that package is working.
That is government spending on infrastructure projects.
Access, which is sometimes called the Federal Treasury in exile, says these projects are now leading Australia’s investment growth.
But its assessment is still sanguine.
“We don’t expect government projects will fully compensate for the fall in private investment over the next two years,” Access says.
“But it is providing a decent offset.”
Does this really matter to ordinary Australians?
Access has no doubt about that.
“…just as business investment drove the boom in Australia’s economy,” it says, “it now threatens to be central to the bust.”
So far, at least, Australia has managed to avoid a technical recession. That is, two successive quarters of negative growth.
But falling export prices, weaker demand and tighter lending conditions have all combined to cut private investment.
And Access admits it is not optimistic about prospects for a recovery in this area in the immediate future.
It says it is “bearish” on the Australian business investment outlook.
“…the falls in croporate profits and capacity utilisation are likely to be large enough to see the pipeline of projects still shrink notably in 2009-10,” Access said.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
Wednesday May 22
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