Fed: Costello says sub six per cent jobless rate within sight

AAP General News (Australia)
08-17-2000
Fed: Costello says sub six per cent jobless rate within sight

CANBERRA, Aug 17 AAP - Australia's economy now had the capacity to take unemployment
below six per cent, Treasurer Peter Costello said today.

But he warned further rises in Australian interest rates could depend on how well the
United States managed its current economic boom.

The strength of the world economy has been cited by Australia's Reserve Bank as one
of the reasons for its decision to hike interest rates.

Mr Costello said whether this continued to push up interest rates would depend on how
well authorities in the US managed the world's largest economy.

"So far the news has been good," he said in an interview with Dow Jones Newswires and CNBC Asia.

"That will be good for our economy, it will be good for the region and it will be good
for monetary policy."

But Mr Costello said even without interest rate rises, the government still expected
the economy to slow slightly this year.

However he still expects the economy to have grown above four per cent in the year
to June just ended.

And with unemployment hitting 6.3 per cent in July, the lowest level in 10 years, Mr
Costello said the Budget forecast of a jobless rate of 6.25 per cent by June next year
was likely to be bettered.

"You would have to say that forecast is well within our grip and maybe we will do better
than that," he said.

"But even at six per cent, I wouldn't see that as the end point for the Australian
economy. I think we have the capacity to lower unemployment further."

Mr Costello said the government would not be wasting the Budget surplus in a bidding
war with the ALP at the next election.

"This is our fourth surplus and whilst economic growth continues as we expect it to,
we are forecasting another four years of surplus," he said.

"We don't intend to put that at risk."

And he insisted he was happy to remain treasurer, despite recent remarks by Prime Minister
John Howard suggesting he could quit the job after the next election.

"I'm quite happy being treasurer," Mr Costello said.

"And I will be dedicating everything I have to it, I can assure you of that."

AAP ss/mfh/arb/bwl

KEYWORD: COSTELLO

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