loss of incomes and jobs would be even more pronounced. whatever the timing of the recovery, when it does come, we should not be expecting that we will return quickly to business as usual. rather, the twin health and economic emergencies that we are experiencing now will cast a shadow over our economy for some time to come. it is highly probable that the severe shocks we are now experiencing will change the mindsets of some people and businesses. even after the restrictions are lifted, it is likely that some of the precautionary behaviour will persist. and in the months ahead, we are likely to lose some businesses, despite best efforts, and some of these businesses will not reopen. there will also be a higher level of debt and some households might revaluate the risks of having highly leveraged balance sheets. it is also probable that there will be structural changes in the economy. we are all learning to work, shop and travel differently. some of these changes will probably stay with us, requiring a rethinking of business models. so the crisis will have reverberations through our economy for some time to come. the best way of dealing with these reverberations is to reinvigorate the country ’ s growth and productivity agenda. as we look forward to the recovery, there is an opportunity to build on the cooperative spirit that is now serving us so well to push forward with reforms that would move us out of the shadows cast by the crisis. a strong focus on making australia a great place for businesses to expand, invest, innovate and hire people is the best way of extending the recovery into a new period of strong and sustainable growth and rising living standards for all australians. the reserve bank ’ s policy response i would now like to change tack and turn to the reserve bank ’ s policy response. to recap, that response has had five elements : 1. a reduction in the cash rate to 25 basis points with forward guidance that the cash rate will not be increased until we are making sustainable progress towards our goals for full employment and inflation 2. the introduction of a target for the yield on 3 - year australian government bonds of 25 basis points, and a preparedness to buy government bonds in whatever quantities are needed to achieve that target 3. the introduction of a term funding facility, under which authorised deposit - taking institutions ( adis ) have access to funding from the reserve bank for three years at 25 basis points, with additional funding available if adis increase

that are of relevance for tonight ’ s topic are as follows : our region - which is mainly the developing countries of asia - has grown a lot quicker than the world as a whole and so its share of world output has risen from 10½ per cent in 1980 to 24 per cent in 2001. not only has the total risen, but each country, with the exception of the philippines, has been able to increase its share of world output ( table 2 ). it is worth reminding ourselves of this major trend, because it tends to be overshadowed by our more recent memory of the asian crisis of 1997 and 1998. table 2 asian output ( per cent ) share of world output change in share 1980 - 2001 china india korea indonesia taiwan thailand philippines malaysia hong kong vietnam singapore 3. 42 2. 78 0. 73 1. 12 0. 50 0. 54 0. 79 0. 24 0. 26 0. 18 0. 11 12. 03 4. 68 1. 69 1. 55 0. 99 0. 93 0. 67 0. 44 0. 40 0. 36 0. 24 251. 9 68. 6 131. 2 38. 1 99. 4 73. 2 – 15. 6 86. 0 50. 6 93. 6 111. 6 total total ( excl. china ) 10. 67 7. 25 23. 96 11. 93 124. 7 64. 6 in contrast, the developed countries of the oecd area have grown less rapidly than the world average and their share of world output has fallen from 57. 5 per cent in 1980 to 52. 4 per cent in 2001. within the group of developed countries, only three have managed to increase their share of world output - the united states, australia and ireland. if we leave out ireland because of its small size and its exceptional circumstances, australia and the united states are the only two developed countries of reasonable size and reasonable initial income per head to have increased their share of world output. some people would discount our achievement by pointing out that a fair bit of our increase in share was due to higher population growth resulting from higher levels of immigration. but that should be seen as a strength rather than a weakness if we are interested in which areas are growing and which are declining in relative importance. also, it points to favourable developments in the future, as high - immigration countries are less susceptible to the strains imposed by an aging population. table 3 oecd output ( per cent ) share of world output change in share 1980