THERE are major economic storm clouds on the horizon and the Federal Government must scrap the carbon tax and rein in spending to protect the Australian economy, the Opposition says.
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Acting shadow treasurer Andrew Robb said the Government was not doing enough to fireproof the economy as the crisis in Europe worsens.
The Government has relied too heavily on the mining boom, Mr Robb said in Melbourne yesterday.
''The crisis in Europe is going to get worse, the US is in almost a permanent stalemate, their economy has seriously stalled and we are going to see our economy weakening as a consequence,'' he said.
''There are major economic storm clouds on the horizon ... Australia is very vulnerable to any major downturn around the rest of the world.
''The first thing that will happen is that commodity prices will fall off dramatically, and when commodity prices fall off the Government's budget is in total tatters.''
Mr Robb said the Government needed to put an indefinite hold on the carbon tax and cut spending while the Reserve Bank of Australia should cut interest rates, helping to lower costs for business while improving confidence.
''The Government has got to look at immediately cutting costs, they've got their head in the sand,'' he said.
''To be pursuing a carbon tax in this environment is just economic madness, it is killing confidence in the economy, it is why there is a crisis of confidence across the Australian economy.
''There are many sectors of the Australian economy technically in recession. We're blessed with a mining boom, but many other parts of the economy are in deep trouble.'' AAP
