Media Release

October 13, 2008

Australian economy’s on-going strength good for the Pacific region

The ongoing strength of the Australian economy bodes well for the economic security of the Pacific, says Duncan Kerr SC, Parliamentary Secretary for Pacific Island Affairs.

While the global economic crisis is expected to blunt growth across the world, Australia’s continuing economic strength is good news for its neighbours in the Pacific.

“According to recent IMF reports the strength of the Australian banking system looks set to insulate the Australian economy and in turn the Pacific from the full brunt of the worldwide credit crunch,” Mr Kerr said.

“Australian financial institutions are well capitalised, have strong balance sheets and operate in a well regulated financial service environment.

“Whereas growth in most leading economies is predicted to decline to just 0.1 per cent in 2009, growth in Australia is anticipated to be 2.5 per cent in 2008, and 2.2 per cent in 2009.

“This is good news for our region. A resilient Australian economy in the face of a global financial crisis is also a positive for the Pacific.

“Small island states across the world are vulnerable to external shocks. Recently we have seen the implications of this on energy and food security in some of our smaller island neighbours.

“Australia is committed to a secure and stable Pacific. One of the best ways in which we can do this is to continue to be a strong economic pillar in our region.

“Continuing economic growth and reform is critical to meeting the development challenges we all face. We have seen and continue to see the benefits that stable governance, economic growth and security can deliver.

“Closer economic integration underpinned by strong trade links and development of the Pacific’s private sector will further build on our collective economic stability.

“As a wise man once said ‘many sticks are harder to break than one’.”

Media inquiries: Mr Kerr's office - 02 6277 4991 - Departmental Media Liaison 02 6261 1555