Jobs in jepoardy

Employers have signalled they will start firing staff to stem the growing impacts of the global financial crisis.

An Australian Industry Group (Ai Group) survey, to be released today, warns businesses are in for a “rough ride”, with three in five revealing they had substantially felt the effects of the economic meltdown.

The survey of 303 manufacturing, services and construction businesses in October found that “companies are revising their business plans, lowering employment and cutting costs”.

However, worsening business confidence has a silver lining for mortgagor homeowners, with the Reserve Bank of Australia widely tipped to announce tomorrow a 0.50 percentage point cut to the official cash rate.

It will be the third interest rate cut since September and takes the official cash rate to levels last seen in March 2005, when it was 5.5 per cent.

Assistant Treasurer Chris Bowen said during an interview yesterday banks should pass on as much savings to homeowners as they could.

“There have been interest rate reductions outside of the official rate reductions and the banks indicated that in large part, it is due to the confidence that has been restored in Australian banking due to our bank guarantee,’’ Mr Bowen said.

“We continue to talk to the banks and say that they should pass on as much as they can at all times.”

Asked about the health of the surplus, he said details would be revealed soon in the mid-year economic statement.

It comes as the deadline for banks to fully implement the Government’s account-switching package has been reached.

Under the scheme, revealed by Treasurer Wayne Swan earlier this year, financial institutions will have to help their unhappy customers switch to a competitor.

Workers targeted for sack

Meanwhile, the effects of the Government’s $10.4 billion economic stimulus package-aimed to keep low and middle-income earners spending-will be monitored by the Ai Group in further surveys”.

“In response to this monitoring, serious consideration may need to be given to additional measures,’’ Ai Group chief executive Heather Ridout said.

“There will be unpredictable consequences on industry and individual businesses of this downturn, which will require flexible and adroit policy responses if investment and jobs are not to be lost.

“This survey, combined with anecdotal evidence from a wide cross-section of sources, confirms that we are in for a rough ride.”

The outlook for jobs also appears grim, according to the latest Olivier Job Index, which surveys job ads on the internet.

The index fell 4.42 per cent last month and is down 6.16 per cent on this time last year-the first fall in annual growth since 2003.

Olivier Group director Robert Olivier said the fall was across almost every industry, and the rate of decline was accelerating.

“This will inevitably flow through to the official unemployment rate,"he said.

NSW had the worst month, with job ads falling 8.04 per cent as job losses in financial services hit Sydney particularly hard.