Minister tells Aussie ICT to brace for US crash

Theo Theophanous, Victorian state Minister for Industry, Trade, ICT and Major Projects, told attendees at a Melbourne conference yesterday that the US economic downturn will affect both local suppliers and staff of American owned companies in the near future -- but the local industry looks strong enough to absorb the impact.

Speaking at an Australian Information Industry Association (AIIA) briefing in Melbourne yesterday, the Victorian ICT Minister claimed that the knock-on from the US slump could lead to staff cuts in the Australian operations of US-owned companies, and see more jobs going offshore -- but added the performance of Australia's economy remains strong enough to ensure steady growth in the ICT and other sectors.

Theo Theophanous, Victorian ICT Minister

Credit: Parliament of Victoria

"The global ICT industry will probably need to brace itself for fallout from current economic conditions in the US," said Theophanous.

An AIIA spokesperson told ZDNet.com.au that the Minister was trying to provide some reassurances to local industry.

A spokesperson for the Minister said today that Theophanous has spent considerable time "reinforcing the strength of Victoria's ICT, especially in its job creation ability".

"Melbourne is growing faster than any other city, our job growth is greater and that is due in part to the growth of the ICT industry," said Theophanous.

The AIIA spokesperson said the Minister's comments on the possibility of job cuts from US companies with Australian operations was simply an "off the cuff remark", and "was in response to a question rather than part of the main speech itself".

"I see ICT as a standalone industry, an industry that drives job creation," said Theophanous in yesterday's speech.

The Minister's comments come after research group IDC predicted late last year that global IT market growth would fall from 6.7 percent in 2007 to 5.5 percent in 2008.