Australia revises its outlook downward
Australia's prime minister, treasurer, industry leaders, and academics agree: The immediate outlook for their nation's economy is poor.
This view is reflected in declining prices on the stock exchange, in near-record unemployment, and in a steady decline in the value of the Australian dollar.
To make matters worse, Australia's two largest industrial states face electric-power shortages during the coming winter, and these could severely restrict industrial output and reduce spending and investment.
This week federal Treasurer John Howard said the government was facing one of its more difficult tasks of economic management since taking office at the end of 1975.
''There is simply no alternative at present to a degree of discomfort and a degree of economic adversity,'' he told Federal Parliament last week.
Prime Minister Malcolm Fraser puts the blame for the poor outlook mainly on international developments, though he is strongly critical also of wage-rate increases within Australia.
In a ''state of the nation'' address to Parliament several weeks ago, the prime minister urged Australians to lower their expectations in anticipation of a difficult domestic and international economic climate.
International events, he said, affected Australia profoundly. He added: ''We cannot but be affected by factors such as the high cost of funds, nor can we avoid being affected by the protectionism which strikes at many of our exports, especially our farm products. And it is important for us to be aware of the very real dangers that are created by increasing protectionism in other countries during a time of world recession,'' he said.
Mr. Fraser warned that in light of stagflation overseas, the government would be committed to pursuing its domestic policy objectives ''far more slowly than we would wish'' because it would have to concentrate on seeking economic growth.
He said it was significant that Australia had grown at twice the rate of the average of the Organization for Economic Cooperation and Development in the past two years and that the OECD had predicted a 3 percent growth for Australia in 1982 against an OECD average of 1 percent.
However, one of Australia's major banks this week doubted the validity now of the OECD forecast on Australia's growth for 1982. The ANZ Bank in its monthly ''Business indicators'' report, said: ''It is now apparent that Australia will not readily attain economic growth above the OECD average in the early 1980s on the basis of rapid resource development and export buoyance.''