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“Not out of the woods yet”
by Alan Thornhill

Australia still has a rough economic road ahead, according to the Prime Minister, Kevin Rudd.

Mr Rudd told parliament, on the first day of its Spring session yesterday, that it would be wrong to assume that global economic growth would simply resume, in the months immediately ahead.

He was commenting on the results of the National Australia Bank’s latest monthly business survey, which showed business confidence in Australia has bounced  back to  a pre-crisis level.

Even the bank, though, was cautious in its assessment of this result.

It said a “closer look” at the data suggests that it might be difficult to maintain this freshly restored momentum.

The bank noted that forward orders had risen, driven by school repairs and the first home owners’ grant.

However it said, both retail and wholesale orders had fallen, as early stimulus measures passed.

The bank also said there are now signs that the global economy is stabilizing.

Mr Rudd warned, though, that major world economies are still not growing.

He said, in these circumstances, there is just one path that Australia can take.

“Productivity. Productivity. Productivity,” the Prime Minister said.

“It is the right strategy for Australia,” he added.

“But this country is by no means out of the woods yet,” Mr Rudd warned.

The Treasurer, Wayne Swan, who also spoke at question time, said the International Monetary Fund and the Reserve Bank had both endorsed the measures the government had taken, to stimulate the Australian economy,  after the crisis struck late last year.