Fed: US Housing crisis effects on Aust still unclear: Corbett

AAP General News (Australia)
12-03-2007
Fed: US Housing crisis effects on Aust still unclear: Corbett

CANBERRA, Dec 3 AAP - The effect of the US housing crisis on Australia is still unclear
and it will all depend on how deeply America and Europe are hit, a leading Australian
businessman says.

Former Woolworths chief executive and current Wal-Mart director Roger Corbett says
he does not expect Australian retailers to struggle over the Christmas period following
successive interest rate rises.

"Interest rate rises are meant to dampen something but I think there is plenty of consumer
confidence and I see no reason why retail sales this year should not be particularly strong,"

Mr Corbett, who is also a Reserve Bank board member, told ABC radio.

But he said it is all a balancing act and Australia has still avoided serious impacts
from the US housing crisis.

"The interesting thing will be to see what happens in America and whether this sub-prime
interest factor spreads wider than it is at the present time," he said. "I don't think
that position is quite clear yet."

Mr Corbett said both the European and US markets had shown signs of tightening in recent weeks.

"I've just come from Europe and I think if anything it is a little tighter and there
is a little bit more constraint in those economies than there was, say, two or three weeks
ago."

He said whether the ripples are felt in Australia all depends on how the situation
is handled overseas.

"It all depends on how deep the effect is in the United States and whether that moves
to Europe and ... I think that is slightly worse than it was two or three weeks ago."

Mr Corbett said the incoming Labor federal government had inherited a strong and robust
economy and the Australian community was waiting to see how the new government handles
that.

"(Prime Minister-elect) Kevin Rudd has made quite a point in the election campaign
that he was a very conservative economic manager and I think the community will be waiting
to see that he is."

AAP kc/rs

KEYWORD: HOUSING CORBETT

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