Australian Prime Minister Kevin Rudd has warned economic conditions will worsen this year but is promising to take a "steely" approach to the fallout from the global financial crisis.
Mr Rudd told an Australia Day reception on Monday that 2009 was going to be tough.
"Things will get worse before they get better," he said. "The magnitude of the global financial crisis almost beggars belief."
The economic turmoil was the worst the world had seen since the Great Depression of 1931, Mr Rudd said.
He promised to govern with "a combination of steely economic management and compassion for those who need support".
Mr Rudd blamed greed and a culture of excessive risk-taking for the crisis, saying it had brought massive economic disruption to global financial markets and the global economy.
Those markets had been inadequately supervised and the world had to develop warning systems to prevent it all happening again, Mr Rudd said.
He asked bosses to do everything they could to avoid sacking workers and asked workers not to demand big pay rises.