Commercial banks became more cautious in their lending, particularly after the large amounts they had directed to Telecom companies. By contrast, in Australia there has been no noticeable widening of risk spreads in the corporate bond market over the past year, and credit has been easily available from intermediaries, with no reports of significant changes in banks' lending attitudes.
If we are to hold our own in the international competitive environment, we will need to enable workers from shrinking industries to migrate as smoothly as possible to new growth industries. That requires a labour market which is not just flexible on the edges.