yet another recession under labor

Rudd concedes recession is possible

KEVIN Rudd has conceded that the Australian economy is slowing and that the worst global economic conditions in 30 years could spark job losses and a recession.

With bank lending and retail sales figures slumping to recession levels this week, the Prime Minister also urged banks to pass on in full any rate cuts delivered by the Reserve Bank of Australia.

JOHN DURIE: Why banks won't cut rates

Economists are tipping a rate cut, possibily as early as next week, after recent economic data pointed to a sharp slowing in the economy.

The official cash rate, which has risen to a 12-year high of 7.25 per cent, could be cut by as much as 0.5 per cent as the RBA tries to avoid stalling the economy.

Speaking on Melbourne's 3AW radio today, Mr Rudd refused to rule out a recession but argued Australia was in a better position than most other economies in the Western world to ride out the financial turbulence.

Asked if there were more job cuts ahead, after recent layoffs by major corporations including Qantas and Starbucks, Mr Rudd said: “Well, if you've got a slowing economy coming off the back of the highest inflation rate in 16 years and 12 interest rate rises in a row, then the flow-through to growth in the economy and the flow through to employment, one just follows the other.”

Mr Rudd maintained that the Government's economic settings were correct.

“I believe that we have a strong policy course of action to see this economy through, we are in the best position, in a better position than most other economies in the Western world given our strong budgetary position, the independence of our Reserve Bank and as well as a clear strategy of economic reform.

“It will be tough. We are not immune from the global economy but I believe we've got strong policy settings for the future.”

Retail figures released on Thursday showed merchants have been relying on inflation to deliver revenue growth throughout this year. The volume of goods being sold had been falling since the beginning of the year. There was a 0.3 per cent fall in the March quarter and a 0.6 per cent drop in the June quarter.

The slump in consumer spending was most savage in department stores and clothing retailers, were sales slumped 5 per cent in June. Spending on food dropped by 0.2 per cent.

Lending to business, which was rising at an annual rate of 23.7 per cent as recently as January, had managed an annual growth rate of only 4 per cent over the past three months.
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Kevin07 is not looking all that great in 08
What a let down this poor old fellow has been !!!!




A Picture is worth a thousand words, & its certainly the case with this one.
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