Telstra has unveiled a sweeping overhaul of divisions that contain half its staff. Photo: James Davies
Telstra is poised to make deep cuts to its 30,000-strong Australian workforce, as consumer confidence has slumped and mining investment has gone into decline.
The telecommunications giant unveiled a sweeping overhaul of the divisions that contain half its staff on Wednesday, in a move that could lead to substantial job losses.
The announcement came as federal Treasury and the new Parliamentary Budget Office blamed both sides for Australia's slide into a structural budget deficit - a deficit Treasury warns is now likely to remain for another six years.
The combination of news was a blow to government hopes that activity and jobs growth in the non-mining sectors would help to fill the gap left by a fall in spending by resources giants.
The government's official commodity forecaster confirmed the resources investment boom had peaked this year. Cost blowouts had caused $150 billion of projects to be scrapped or delayed in the past year, the Bureau of Resources and Energy Economics said, as it predicted mining investment would decline from its current level of $268 billion.
The Westpac Melbourne Institute index of consumer sentiment dropped by 7 per cent this month, from 104.9 to 97.6, a level where pessimists outnumber optimists.
The fall, which came despite this month's cut in interest rates, was blamed on a budget that removed key benefits from households and forecast deficits until 2015-16.
Myer's chief executive, Bernie Brookes, said confidence was patchy and there were no signs of a significant turnaround in consumer sentiment.
''We'll continue to invest, getting ready for the consumer to come back but the budget as evidenced by the consumer sentiment is not particularly good,'' he said.
Although the overall reading of confidence fell sharply, a sub-index on whether now is a good time to buy a house jumped by more than 10 per cent in the month and is up by a fifth in the past year.
In its debut research paper, the budget office estimates Australia will still be in significant budget deficit in 2016-17, even though the budget papers forecast a $6.6 billion surplus by then.
If so, the paper says, it would be only because mineral export prices remain unusually high, swelling tax revenues. It predicts the structural balance - which assumes long-run average prices and levels of activity - will then be in deficit by between $5 billion and $28 billion.
In a separate paper, Treasury gives similar estimates, saying the budget will remain in structural deficit until 2018-19, three years after it is officially forecast to be in surplus.
With Glenda Kwek, Peter Cai