Mr SOMLYAY (2:43 PM) —My question is addressed to the Treasurer. Would the Treasurer advise the House of the results of the building approvals survey released today by the Australian Bureau of Statistics? What does this survey and other recent economic data indicate about the ongoing strength of the Australian economy?

Mr COSTELLO (Treasurer) —I thank the honourable member for Fairfax for his question—

Government members interjecting—

Mr COSTELLO —Yes, he is a good member. I can inform him that building approvals for the month of July were released today, and they showed that total dwelling approvals increased in that month by 6.3 per cent, coming after a rise of 3.4 per cent in June and 29.1 per cent in May. Private house approvals rose by 11 per cent in July. Since the extension of the First Home Owners Scheme, private house approvals have increased by over 63 per cent. House building is being supported not only by the government's First Home Owners Scheme but also by the historically low interest rates, which currently are at 6.8 per cent, enabling many young Australians to buy and build a house for the first time.

I have also been asked about other economic data, and I can inform the House that the trade figures for goods and services for the month of July were released today. They showed that in the month of July Australia recorded a surplus of over $1,089 million. It was the sixth consecutive surplus in a row and the largest surplus on goods and services, excluding the RBA gold sales in 1997, on record in Australia. That backs up the figures yesterday showing Australia's current account deficit fell to its lowest level in 21 years.

Although in the July figures exports moved down somewhat, imports moved down more. But compared with July last year, non-rural exports were up 11.5 per cent and rural exports were up 10.6 per cent. Again, I pay tribute to the farmers of Australia for their wonderful export effort in the last year, supported by a competitive exchange rate and also by the fact that, for the first time in Australian history, exports sailed tax free out of Australia on equal terms to all the other countries of the world because this government had the courage to reform the Australian taxation system. I note in passing that the Minister for Trade, Mr Vaile, is in Mexico at present at a meeting of the World Trade Organisation, pressing for more market access and better conditions for Australian exporters, and we wish him well.

Overnight the second revision of US GDP growth for the June quarter was released, and it was revised down somewhat from the first estimate for the June quarter. It implies that the US economy in the June quarter grew by 0.04 per cent, which is marginal at best and probably a false precision. It indicates that, whilst the US economy did not go negative in the June quarter, it was close to zero, showing no growth at all. The Japanese economy grew by 0.1 per cent in the March quarter. In our region Singapore, Taiwan, Thailand and the Philippines had negative quarters in March, and Singapore and Taiwan had negative quarters in June, confirming that both those economies are in recession—and quite a pronounced recession. So the world economy is undoubtedly weakening. The US economy at the moment is weaker than it has been for at least a decade. A good part of our region is now in recession, and that undoubtedly will affect Australia's growth prospects.

I can report to the House that, of the industrialised countries that have reported for the March quarter, Australia was the strongest, showing growth at 1.1 per cent. As the world economy weakens, Australia will rely on its exporters and the competitive impetus that they are giving. The kick back in of the housing cycle will be positive for our economy, but nobody should underestimate the difficulties that the world will be facing over future quarters, nor the commitment that Australian exporters have shown and this government will show to keep the Australian economy growing as it is—one of the fastest growing economies in the industrialised world.