Australian economy needs to fill financial 'pothole'
AUSTRALIA'S economic engine is spluttering, requiring swift action if the country is to avoid a financial break-down.
An expert report from Deloitte Access Economics points to giant mining investment reaching its peak this year, then starting to slow.
The Business Outlook warned Australia must now find a new engine to power the country, even as cuts from the Federal and State governments have made matters worse.
"The strongest contributor to Australian growth will peak, so the rest of the economy needs to fill a potential pothole," the report states.
"But Federal and State Government cuts have deepened that pothole."
A high Australian dollar combined with low export prices for minerals will prove a challenge.
But Deloitte praised the Federal Government's abandoning of the surplus, describing the Treasurer's pursuit of savings through cuts as putting a recovery at risk.
"The approach was starting to hurt Australia's economy, so the decision to abandon the surge for a 2012-13 surplus was a sensible one," it said.
It conceded while repair work was needed for government budgets of all levels, that work had to be done smarter and with less haste.
Deloitte fails to find an industry properly prepared to fill the gap, although it suggests health and education sectors will "make good gains".
Instead it points to improvements in Europe, the United States and Japan, not as a saviour but as a green chute.
"At least global risks now look less dangerous," it said.