Global uncertainty, US recession fears weigh on Australia's economy | The Business | ABC NEWS
Australia’s economy is facing major challenges. Fears of a US recession and a global slowdown caused by Donald Trump’s tariffs and trade war with China is hitting business confidence, hiring and investment plans. Barrenjoey Capital Partners chief economist Jo Masters says the longer businesses delay making “big decisions … then the more risk you get to what was already just a very early stage recovery in Australia”. The trade war could also cause the closure of Chinese businesses that make vital components for Australian manufacturers, including packaging. Some firms are also worried about a flood of cheap Chinese products coming into Australia that were destined for America.
Economists say with big government spending commitments, Australia needs to stop overrelying on income tax and revenue from commodities and instead raise taxes, including the GST. NAB group chief economist Sally Auld says Australia needs to stop running structural budget deficits and boost productivity growth. The number of economic headaches facing Australia means the honeymoon period for the second term Albanese government is likely to be short. Forecast interest rate cuts will provide economic some relief in what is a gloomy outlook.
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