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There is room for an easing of monetary policy which would benefit small business during the economic downturn, a leading business group says.

Business was bracing for a subdued close to 2009, even though the government’s economic stimulus measures were having a positive impact, the Australian Chamber of Commerce and Industry said.

There wasn’t much more the government could do fiscally, but there were other policy levers.

“We believe there’s room for further monetary easing which would certainly help small business in the current environment,” the chamber’s chief executive Greg Evans told ABC Television.

An OECD forecast that Australia’s unemployment rate would reach 7.7 per cent in 2010 was “too pessimistic”.

“We’re actually surprised about the resilience of the labour market.”

Employers were retaining staff because they knew when it would be hard to fill skilled vacancies during a recovery.

“But we are seeing that shift from full-time to part-time (work).”

Older workers were also more inclined to keep working because their superannuation savings had deteriorated.

“New entrants are going to find it difficult rather than there being major job losses,” Mr Evans said.