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1998-05-14 23:20:34


Australia's Economy Could Lose 1% (If They're Lucky)



The threat of y2k is a 1% reduction in the gross national product. So says a recent forecast.

This is regarded as a scary forecast.

I would call it a form of denial -- one that will grow in popularity, especially among government officials. When the best face you can put on a story is to forecast a recession, it's a grim story.

This is from the AUSTRALIAN FINANCIAL REVIEW (May 14).

* * * * * * * *

The Australian economy could shrink by 1 per cent when struck by the millennium bug, according to warnings issued yesterday on the problem's potential to put companies into insolvency and national trading partners into recession.

The grim forecast broadens the call for rapid action on the Year 2000 computer problem in the wake of strong Federal Government measures contained in Tuesday's Budget. . . .

"It's got the potential, I think, to knock 1 per cent off our GDP," Mr Phil Ruthven, the executive chairman of IBIS Business Information, said.

"The Year 2000 bug is certainly going to knock economies around. Australia's fortunately in the top-three most-aware countries, but that isn't to say that it's fully prepared because in fact, it's not."

Speaking at a Sydney conference, Mr Ruthven warned that personal safety would take priority over business problems as an otherwise stable society was going to encounter public transport problems and other everyday upsets: "It's going to be disruptive and irritating rather than suggesting there's an armageddon on the way," he said.

The chief executive officer of the Federal Government's Y2K industry program, Mr Graeme Inchley, would not quantify the impact of the millennium bug on the economy but said some businesses were moving too slowly.

"It might not put people out of business but it will certainly slow them down," he said of the computer problem.


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