Australia will take budget measures to cushion an economy facing its worst decline in terms of trade in more than half a century, Treasurer Joe Hockey said on Sunday, with the government poised to unveil large cuts to services and spending.
The budget cuts are expected to be announced on Monday alongside a mid-year economic outlook that will factor in the heavy hit Australia's resource-dependent economy has taken from a sharp fall in commodity prices in recent months.
"If we don't use the budget as a shock absorber for this extraordinary fall in the terms of trade, then Australians will lose jobs, and we'll lose our prosperity," Hockey told reporters in Sydney.
"The forecast decline in the terms of trade this year is the largest since records were first kept in 1959," he said. Economic growth is forecast to stay at 2.5 percent and rise to 3 percent over the next few years, Hockey said, while unemployment is likely to rise to levels "a tick higher" than forecast in May.
On Saturday, Finance Minister Mathias Cormann confirmed in a television interview that jobs would be cut, after the Australian newspaper reported that 175 government agencies are expected to be axed and the number of government workers reduced to levels seen eight years ago.
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