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Mon, Aug 24, 2009 - Page 10 News List

Ministers to demand continued stimulus

STILL FRAGILE: G20 finance ministers say nations must press on with financial reforms and continue to support jobs and growth as the world slowly recovers from recession

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A street wall painting depicts, left to right, former US Treasury secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and Securities and Exchange Commission Chairman Christopher Cox as the “Axis of Evil” in New York on Saturday. US Federal Reserve chief Ben Bernanke, in his clearest signal yet of impending growth from recession, said on Friday that prospects for global recovery were good despite financial market strains, but he cautioned that any emerging economic growth from the worst global slump in six decades would be slow.

PHOTO: AFP

Finance ministers meeting in London next month will speak against any premature end to stimulus programs and press on with reforms of the global financial system, Australian Treasurer Wayne Swan said yesterday.

Ministers from the G20 industrial and emerging nations will meet on Sept. 4. Discussions last week with some of those attending showed that there were still concerns about the fragility of the global recovery, Swan said.

“All of them underscored the importance of fully implementing our commitments to support jobs and growth,” he said in a weekly economic newsletter. “Ministers will be committed to implementing reforms to the global financial system and ensuring we support recovery in developing countries.”

World leaders pledged more than US$1 trillion in emergency economic support and tighter regulation of hedge funds, banks and credit-rating companies at the G20 meeting in April. They will gather again next month in Pittsburgh, Pennsylvania, after a meeting of their finance ministers.

Australia distributed A$12 billion (US$10 billion) in cash handouts to households this year and pledged a further A$22 billion to upgrade roads, railways, ports and hospitals to help keep its economy afloat.

Earlier this month, the central bank reversed a forecast 1 percent economic contraction this year, instead predicting GDP would expand 0.5 percent this year and grow 2.25 percent next year.

The strength of Australia’s financial system, assisted by the government’s banking guarantees, has been an important factor in the strong performance of the economy, Swan said yesterday.

Credit has continued to flow, allowing businesses to keep operating and keep employing people, he said.

Small businesses face “tough conditions” and it is important the government maintains its tax breaks and stimulus measures to help keep them afloat through the global recession.

“There are still so many challenges presented to us by the global recession and the job of supporting employment in our economy is far from finished,” he said.

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