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Australians asked to spend $5.2 billion before Xmas

(Agencies)
Updated: 2008-12-08 17:15

Jobless Rise Inevitable

The survey from Australia and New Zealand Banking Corp showed job advertising in newspapers sank 12 percent in November, after a similar drop the month before. The combined fall was the biggest in the 30-year history of the series and fuelled worries official data on employment on Thursday would show a reversal in what has been one of the most resilient parts of the economy.

Customers use the escalators at a shopping center in central Sydney December 8, 2008. The Australian government delivered more than A$8 billion ($5.2 billion) in cash payments to families and pensioners from Monday and urged people to spend the money to help the economy avoid recession. [Agencies]

"Recently, the labour market has surprised with its strength," Nomura economist Janu Chan said, adding that firms were cutting workers' hours rather than firing them.

"The slowdown in domestic demand should, however, inevitably lead to further weakening in job growth and a rise in the unemployment rate."

The jobs data is expected to show that 15,000 jobs disappeared in November after a surprise jump of 34,300 in October when firms took on thousands of part-time workers.

Australia and New Zealand Banking Group plans to cut another 400 jobs by the end of this year, bringing the total to around 800 as it struggles to cope with the global crisis, newspapers reported on Saturday.

The government's cash payments worth A$8.7 billion, or about 0.9 percent of gross domestic product, give 2 million families A$1,000 for each child, and give four million pensioners more than A$1,000 each. Payments will be made over two weeks.

Treasurer Wayne Swan said the move would boost GDP by between 0.5 and 1 percent, and create up to 75,000 jobs.

"This package is a substantial boost to our economy," Swan said, adding the he would keep all options open if further action was needed in 2009 to keep the economy growing. "We will assess that as we go through the early part of next year."

The government said it expects to pay out A$4 billion by Thursday, which businesses hope will provide them with a pre-Christmas boost.

"If people are saving for a rainy day, I can tell them it is pouring outside," Australian Retailers Association executive director Richard Evans told Australian radio.

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