Economic Update

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Date: 01/04/2011

Horrific international events have cast a shadow over the global economy, including Australia's, but most of the effects will not be lasting.

The devastating natural disasters in New Zealand and Japan have taken their toll on the global economy, including Australia's, but - apart from an inevitable rise in insurance premiums - the effects for Australian business are not likely to be too great or longlasting, according to Professor Neville Norman of Melbourne University. Energy prices will continue to be affected, and the Federal Government's push for a carbon tax will add to that pressure, though it's not likely to come into effect unless it has bi-partisan support. At the moment, both sides are playing cheap politics. Next month's Federal Budget will be worth studying for its projections on when revenue from things like the carbon tax will start to flow and when the Budget's expected to be back in balance. Look also for changes to things like the continuing stimulus packages and excise on tobacco and alcohol. Overall, the Australian economy's growing moderately, but there's no room for complacency - other developed economies are now growing faster.