Australia is well equipped to take steps to bolster its economy should global market turmoil see a re-run of the 2009 financial crisis, Treasurer Wayne Swan said on Friday, one of the first leaders to comment on such a step in the current sell-off.
Asian stocks dropped 3 to 4 percent on Friday after panic triggered the worst sell-off on Wall Street since the global financial crisis, sending investors slashing positions and scrambling for cash and government bonds.
Swan, looking to reassure the public and investors as the local share market dived to two-year lows, said Australia's economy remained strong, having avoided recession during the last global crisis, and said the government had the capacity to act if conditions worsened.
"The most important thing is that Australia has strong economic fundamentals and one of the reasons we are so strong is that we avoided recession in the global financial crisis," he told a news conference called to respond to the sell-off. "And because we did that, we have the policy flexibility to deal with uncertainty in the international economy should measures be required," Swan said.
Australia launched a massive stimulus programme during the global financial crisis, equal to more than 7 percent of gross domestic product, the third largest among nations in the Organisation for Economic Co-operation and Development, which also judged it to have been among the most effective.
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