Correction we had to have: Treasurer

Treasurer Peter Costello has dismissed the recent slide in the Australian sharemarket as the correction we had to have.

Asked on the weekend if he was concerned about the decline, Costello said it was something that was “bound to happen” and that “a bit of a breather” may actually be good for the market.

“There would be no other sharemarket in the world that in this year has been at all time record highs,” Costello said.

“That is, the Australian index was outperforming every other index in the world and by a long shot.

“Now, what you have seen is you have seen a bit of a correction, it was always bound to happen. As I keep on saying, markets go up, markets come down.”

The Australian sharemarket registered its first negative return in 10 months in March, falling 1 per cent, largely on the back of a softer materials sector.

The market downturn has hurt fund managers, with few posting positive results in March. The top performer for the month, Portfolio Partners, returned only 0.6 per cent.

“But the fundamentals of the stockmarket are still very strong,” Costello said.

“We have very strong profitable companies which are reporting record profits, we have a strong growing economy, business conditions are good and if the stockmarkets reflects those fundamentals then so be it.

“But you cannot expect the Australian stockmarket to outperform every other market in the world for a continued period of time and a bit of a breather may actually be consistent with more solid, durable, sustainable growth.”