Australia asked to take budget steps to absorb exports shock

PERTH, Dec 14 (Reuters): Australia will take budget measures to cushion an economy facing its worst decline in terms of trade in more than half a century, Treasurer Joe Hockey said on Sunday, with the government poised to unveil large cuts to services and spending.

The budget cuts are expected to be announced on Monday alongside a mid-year economic outlook that will factor in the heavy hit Australia's resource-dependent economy has taken from a sharp fall in commodity prices in recent months.

"If we don't use the budget as a shock absorber for this extraordinary fall in the terms of trade, then Australians will lose jobs, and we'll lose our prosperity," Hockey told reporters in Sydney.