Delegates attending the Diggers & Dealers Mining Forum in Kalgoorlie could be heading to the Exchange Hotel rather early today to drown their sorrows as the S&P/ASX200 continues to plummet.
As of 12.15pm the index was down 241.10 points or 3.04% to 7,702.10 and setting a new 20-day low. The index has lost 2.77% for the last five days but has gained 1.47% over the last year-to-date.
The bloodbath on the S&P/ASX200 comes amid growing concerns the US economy is heading for a recession, which could affect Australia’s growth prospects.
Speaking on the sidelines of the Diggers & Dealers Mining Forum in Kalgoorlie, opposition leader Peter Dutton discusses Australia not being set up to handle the reality of a recession and questions whether the Reserve Bank of Australia might be too cautious with its rate approach.
“Obviously, Australia always faced economic headwinds because we’re a trading nation. We are very exposed to international markets as a result of that. Every government since federation has had to deal with depression, recession, drought, flood … COVID, (global financial crisis) GFC,” Dutton says.
“Every government will face that uncertainty and that circumstance. We know with the Labor Government; they always spend too much money. This government spent $315 billion, which is why we’re now facing a huge problem with inflation. Interest rates have gone up on 12 occasions.
“I’ve been surprised to watch and see what the Reserve Bank has to say tomorrow. Obviously, they meet today and tomorrow. But they will be looking at what’s happening in the United States. They’ll be looking at what’s happening in Canada, what’s happening in the United Kingdom, where interest rates are going down.
“But there’s not talk, unfortunately, of interest rates coming down in the economy here because as the Reserve Bank governor has pointed out, inflation is a home-grown problem here. The problem we’ve got at the moment is that the government has had three budgets. The decisions they’ve made have actually made it harder for Australians, not easier.”
Dutton adds that these decisions have not equipped Australia to deal with the reality of a recession, “whether it’s in the United Kingdom or a downturn in the Chinese economy, obviously, our biggest trading partner”.
“We’ve got to prepare for bad times. Like any family, you need to prepare for a rainy day. And unfortunately, this government just hasn’t done that.”
Write to Adam Orlando at Mining.com.au
Images: ASX and iStock
