Economy can handle global shock: Treasurer

Economy can handle global shock: Treasurer


Agribusiness
Federal Treasurer Josh Frydenberg is confident the Australian economy will withstand pressures.

Federal Treasurer Josh Frydenberg is confident the Australian economy will withstand pressures.

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The Treasurer says the coalition will take all necessary actions to keep Australia's economy afloat, amid fears of an impending recession in the United States.

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Treasurer Josh Frydenberg says the coalition will take all necessary actions to keep Australia's economy afloat, amid fears of an impending recession in the United States.

Two of his cabinet colleagues have also sought to ease people's nerves about the potential of a downturn at home, saying the fundamentals of the Australian economy are strong.

The Australian share market shed more than $63 billion on Thursday in response to fears of a recession, marking its worst day in 18 months.

"We will continue to closely monitor global economic events and will take the necessary actions to ensure our economy continues to grow to the benefit of all Australians," Mr Frydenberg told AAP on Friday.

"Australia is not immune from the fallout of these trade tensions and we are certainly not complacent.

"But with strong foundations our economy is positioned as well as any nation to withstand these challenges."

The global rout came after the US bond yield curve inverted for the first time in more than a decade.

The trend - when long-term bonds start earning less interest than short-term ones - has preceded every American recession in the past 50 years.

Trade Minister Simon Birmingham stressed Australia was facing uncertain times amid the trade war between the US and China, upheaval in Hong Kong, uncertainty about Brexit and tensions between Japan and Korea.

"But the Australian economy continues to show a high degree of resilience," he told Nine's Today Show.

He pointed to the latest jobs figures, with 41,000 new jobs created in July, despite the unemployment rate remaining at 5.2 per cent.

Finance Minister Mathias Cormann said the government was also glad to see progress in the US-China trade war, with Donald Trump saying on Thursday he thought it would be "fairly short".

"We have been pleased to see that there has been some movement," Senator Cormann told Sky News.

"We would like to see this come to a resolution sooner rather than later."

Mr Frydenberg said the government's tax cuts and $100 billion in spending on infrastructure over 10 years would help keep the economy ticking along.

Labor frontbencher Tony Burke said the government needed to bring forward some of its infrastructure spending.

"A whole lot of the projects they promise don't even happen this term," he said.

He said there were also structural problems with the economy such as an alarming number of unemployed people or those wanting more hours.

"You can't use the international circumstances as cover for the fact that structurally we do have some weaknesses in Australia now."

Australian Associated Press

The story Economy can handle global shock: Treasurer first appeared on Farm Online.

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