Mr BARTLETT (2:42 PM) —My question is addressed to the Treasurer. Will the Treasurer advise the House of the June quarter current account figures released today by the Australian Bureau of Statistics?

Mr COSTELLO (Treasurer) —I thank the honourable member for Macquarie for his question. I can inform the House that the June quarter current account deficit was $3½ billion, or 2.1 per cent of GDP. This is the lowest current account deficit as a proportion of GDP for 21 years. The fall in the current account deficit was led by a surplus in trade on goods and services, a surplus of $1.5 billion for the quarter, the largest surplus since the gold sales back in 1997. Abstracting from those gold sales, it is the largest quarterly trade surplus in nominal terms since 1959. The current account deficit was led by a rise in export volumes of 1.1 per cent and a 0.2 per cent decrease in import volumes.

I pay tribute to Australia's farmers and rural producers. In the March quarter, the volume of rural exports rose by a full four per cent, and over the year by 0.7 per cent. For the financial year—that is, the whole of the year ended June 2001—the current account deficit was 2.8 per cent of GDP, the lowest current account deficit in 21 years. As members would know, since the election of Labor in 1983 and Mr Keating's comments about a banana republic in 1986, Australia's current account deficit has been averaging above four per cent. These figures, led by Australia's exports, have—

Mr Horne —Where is the debt truck?

Mr SPEAKER —Member for Paterson!

Mr SPEAKER —Member for Paterson!

Mr COSTELLO —I am asked by the Labor Party about foreign debt. I can inform the Labor Party that foreign debt in the June quarter fell—

Mr SPEAKER —The member for Paterson is defying the chair!

Mr COSTELLO —It fell by two per cent of GDP, from 48.8 per cent to 46.7 per cent, with the export servicing ratio—this is the proportion of exports which is required to service net foreign debt—falling to 9.2 per cent off a high of 20 per cent back in 1990. So the export story for Australia, notwithstanding a weakening world economy, is a good export story. It has no doubt been helped by a competitive exchange rate, and I have mentioned that on numbers of occasions. But, in addition to that, for the first time ever in Australian history, Australian exporters got the same deal as exporters from other countries got: they could export tax free, because this government changed the taxation system.

Labor's system was to tax our exporters and to weight them down with taxes in a way which no other country was doing. With the advent of tax reform, Australian exporters got the same opportunities as exporters from other countries. They have led growth in this particular quarter, notwithstanding a weaker world economy. As a result, Australia's current account is the lowest in 21 years; and in relation to trade in goods and services there is a surplus in the quarter. I pay tribute to the exporters of Australia, particularly our rural producers, for the magnificent performance that they have put in during a weakening world environment.