A chilling forecast of a massive downturn in the economy threatens to send as many as one million Australians into the dole queues this year as the reality of the worldwide financial hits home.

The forecast is in stark contrast to many local commentators and industry leaders who have held out hopes the robust Australian economy would be spared much of the pain already being experienced elsewhere in the world.

ACTU president Sharan Burrow said yesterday a knee-jerk response of redundancies and retrenchments would exact a terrible human toll and be counter-productive for employers and the economy. A major business confidence survey also released yesterday shows bosses are pessimistic about their ability to retain workers, highlighting what many believe to be an inevitable round of job cuts. Convincing companies to redeploy staff, reduce excessive hours and invest in retraining and reskilling workers to be ready for the “eventual recovery” from the global financial crisis will not be easy as the pressure to hold up the bottom line will test the nerve of many.

For her part, Acting Prime Minister Julia Gillard has asked employers to “think about the long term” when contemplating potential job cuts. Considering our nation has just dispensed more than $10 billion to prop up the economy, the Government will be called on to do more.

Convincing anyone to think beyond the short term, though, will be the ultimate challenge.

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