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Thursday, 3 February 1994
Page: 351


Mr STEPHEN SMITH (3.58 p.m.) —Before I deal with the subject matter of the matter of public importance, I want to mention that the opposition spokesman, the honourable member for Mayo (Mr Downer) made the assertion in the course of his opening remarks that the former Treasurer, the honourable member for Fremantle (Mr Dawkins), had not spoken in this House other than at budget time.


Mr Downer —And one other time.


Mr STEPHEN SMITH —The honourable member for Mayo is wrong. He made the assertion that the former Treasurer had not spoken in this House on a previous occasion other than in the course of a budget. I draw to the attention of the House the fact that on 24 November 1993, the former Treasurer spoke on a matter of public importance, and on 18 November 1993 he also spoke on a matter of public importance. In a sense, I am gratified to see that the forensic capacities and memory of the opposition spokesman do not go beyond a couple of months. At the end of the former Treasurer's speech on 18 November, addressing directly the opposition spokesman, he said:

  Let me repeat, in words that the opposition spokesman might just understand when said for the third time . . .

He then went on to make some points, and he concluded by saying:

Does he get it? Has he got it? That is what I said before. That is what I repeat today.

Then his time expired. The House of Representatives Weekly Hansard records the honourable member for Mayo as saying:

You are lying; you are always lying.

The former Treasurer said:

Mr Deputy Speaker, I raise a point of order. The honourable member for Mayo said across the table, `You are lying; you are always lying'. I require him to withdraw.

The Deputy Speaker, you, Mr Jenkins, then said:

If the honourable member for Mayo did make those statements by way of interjection, he should withdraw.

The honourable member for Mayo then said, `I withdraw'. The opposition spokesman should not come into this House and suggest that the former Treasurer has not made speeches on the economy when he has done so in matters of public importance and when the opposition spokesman has been in the House and has been forced to withdraw.

  I move to the substance of the MPI, which is the risk to the economic recovery caused by Australia's balance of payment problems. That is the assertion. Let us now look at the state of the Australian economy and the state of the recovery. This week the Treasurer (Mr Willis) released some revised economic forecasts. Let us look at the revised budget forecasts and see how Australia's economy is currently travelling. The gross domestic product forecast has been increased from two per cent to 3 1/2 per cent. The CPI has been reduced from 3 1/2 per cent to two per cent. The employment growth figure has been revised from three-quarters of a per cent to one per cent. The unemployment rate remains constant at 10 per cent, but the participation rate increases from 62 1/4 per cent to 63 per cent. The current account deficit is revised downwards from $18 billion to $17 billion and, as a percentage of GDP, from 4 1/4 per cent to four per cent, which compares with the 1985-86 figure of 6.2 per cent as an actual percentage of GDP. They are the revised forecasts. It is the December balance of payments figure which the opposition is asserting runs counter to that recovery.

  Let us look not just at the forecasts but at the actual state of our economy at the moment. For the benefit of honourable members opposite, I will read into the record some of the economic fundamentals and parameters that are currently in place. Australia is 30 per cent more internationally competitive than it was a decade ago. We have the lowest inflation rate for 30 years, sitting under two per cent—not 10 per cent, as it was when we last emerged from a recession, under the opposition, in 1982-83, with double digit unemployment and double digit inflation. Inflationary expectations are effectively at an all-time low. We have the lowest interest rates for 20 years. We have the lowest level of industrial disputation for 30 years. Our productivity has increased substantially. Profit shares are at record high levels. Real unit labour costs are 10 per cent lower than they were a decade ago.

  In terms of attracting investment, we have reduced the corporate tax rate to 33 per cent—unlike those opposite, who went to the election proposing to increase it. In terms of investment allowance, accelerated depreciation and taxation concessions for investment in R&D, we have a very internationally competitive tax regime in place as an incentive for investment. As well, our debt servicing ratio is the lowest in a decade. That point is not often made.

  I want to quote something the Treasurer said at a press conference outside Parliament House when he released the forecasts I referred to earlier. I know he is in the House today, but I think it is important that the words are read back to the House for its benefit. The Treasurer said:

. . . we have effectively the best conjuncture of economic fundamentals in the last thirty years with inflation expectations being low, with interest rates being the lowest in twenty years, with industrial disputes at very low levels, our competitiveness the best for twenty years and, most importantly of all, tremendous attitudinal change which is enabling us to make the kind of reforms which the nation needs to continue on a progressive path.

These things have all been achieved as a result of the economic policies of this government over a 10-year period. They have nothing whatsoever to do with the actions of conservative state governments in the last 12 months or two years.

  I want to refer to the Treasurer's contributions in question time earlier in the week because I think an important point that the community needs to understand, and understand well, is that economic recovery is not occurring as a matter of course; it is occurring as a direct result of the government's policy. On Tuesday the Treasurer had this to say:

Let us not be shy about this. This is not some historical accident that is occurring. We are in this position because of the efforts we have made as a nation to rejig the whole economy, to make it much more internationally competitive, to be much more efficient and to be able to hold its place in the world, to get exports out there to compete with imports, and to get back on a high growth, low inflation path—something this nation has not enjoyed for 30 years.

In a subsequent answer in the same question time, the Prime Minister (Mr Keating) said:

The Treasurer made two very telling points. One is that this is not a chance recovery. We did not just happen upon this. A quality, low inflation recovery was not something that just happened overnight but was something to which the whole nation had been put as a consequence, he said, of everyone pulling together. That definitely does not include the opposition, which has done everything to stall any growth in confidence. It has watched every good economic number come out to its chagrin and has not in any way participated in or, as a consequence, been party to, that recovery.

That is the key political point, and that is what those opposite are doing in respect of the December balance of payments figure. They bitterly resent the fact that we are recovering in a fundamentally strong way and they will clutch at any straw to try to do damage to that and to Australia's prospects.

  Let us look not just at the fundamentals but at some of the recent economic indicators. The ANZ bank national savings index rose for the first time since 1991. Building approvals rose 2.4 per cent in December. Demand for skilled workers jumped to the highest rate in three years. In the consumption area, the current price retail trade rose sharply in seasonally adjusted terms in November, which followed strong growth in September and October. Leading indicators in the housing sector have shown continued strength in recent months.

  The Treasurer has dealt with the employment figures. I have dealt with inflation and inflationary expectations. As well, recent business expectation surveys—the Business Council of Australia survey, the Yellow Pages small business survey and the December quarter ACCI-Westpac survey—all report large improvements in business expectations.

  Let us look at the way in which these things have been reported in our newspapers this week. The opposition spokesman drew upon a cartoon. I draw upon the front page of the Australian Financial Review. Earlier in the week we saw a headline which read `An economic high'. In the Australian we saw this headline: `Economic signs "the best for 30 years"'. That is what it is all about; that is what those opposite bitterly resent.

  So far as our balance of payments is concerned, the opposition focused on one month's figures. Let us focus on some fundamentals and go through some of the aspects of our export performance in recent times. Exports have trebled since 1983. Exports of elaborately transformed manufactures have more than trebled, and they are the fastest growing component of our exports. Exports to South-East Asia have grown by 400 per cent over the last decade. Exports have risen from 14 per cent of GDP in 1982 to 20 per cent of GDP in 1992. Exports of manufactures to east Asia have increased 11-fold, or over 1,200 per cent, over the last decade. And the figures go on. An export increase in real terms of over seven per cent per annum was achieved between 1982-83 and 1992-93. In volume terms over the decade, exports of goods and services increased by nine per cent in 1991-92 and by over five per cent in 1992-93. Exports of elaborately transformed manufactures have increased by 16 per cent per annum in volume terms over the last seven years.

  I will not repeat what the Treasurer has said about the monthly balance of trade figures, both inside and outside the House, but it is often appropriate to note things that are said before figures are released. On Tuesday, before the figure was released, outside this House the Treasurer was asked a question on the current account, to which he responded:

Well certainly the current account figures for the first five months of this year have been quite good and we have been running at a bit less than we were last year. As business investment picks up we must expect there would be some impact on imports because business investment is rather import intensive. So as we move through the recovery and as we see business investment picking up, you have that factor coming into play.

The one month's figures will not stop what is occurring: a strong, substantial, fundamental recovery for which this government can take credit. (Time expired)

  Mr DEPUTY SPEAKER (Mr Jenkins)—Order! The discussion has concluded.