Aust economic fundamentals strong

5 Aug 2011, 12:48 pm   -   Source: AAP

Treasurer Wayne Swan says Australia is in a better economic position than the United States or Europe, as the share market opens down.

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Federal Treasurer Wayne Swan says Australia is on stronger economic ground than Europe and the United States.

Mr Swan spoke to the media on Friday shortly after the Australian share market opened down on the back of plunges on Wall Street and in Europe.

"Australians should never forget that our economic credentials are among the strongest in the developed world," he told reporters in Brisbane.

"Australia has a proven track record of dealing with global economic uncertainty.

"There is just a world of difference between the situation in Australia and the situation in Europe and the United States."

The Australian share market fell by around four per cent at the open on Friday, following similar falls overseas over rising fears of another economic downturn.

Mr Swan said growth in the Asia-Pacific region remained strong, and Australia's financial institutions were robust.

"We are located in the right part of the world at the right time," he said.

He said economic power was shifting from the west to the east, and that would have an important bearing on Australia amid times of economic uncertainty.

"We are being impacted upon by events elsewhere in the world and that's been obvious on local share markets for some time," Mr Swan said.

"The fact is the share market in Australia is not back to levels prior to the global financial crisis and now we're being hit by another bout of uncertainty."

However, Mr Swan said Australia was not immune to global events, as shown by the fall on the share market.

"The fact is that the share market in Australia is not back to the levels prior to the global financial crisis and now of course it is being hit by another bout of global uncertainty."

But he said the fundamentals in Australia would help protect the economy.

He said unemployment was low, the nation's financial institutions were robust, and public debt was low. "There's no doubt there's a long and painful adjustment yet to take place in terms of the United States, particularly when it comes to dealing with public debt and budget deficits," he said.

"This week saw the first step along that road but we need to see more."

He said Europe was also facing a period of adjustment, but again pointed to strong growth in the Asia Pacific region.

"That is why our prospects are fundamentally different to what's going on in Europe and the United States."

Economy Swan

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