Mr SECKER (3:14 PM) —My question is to the Treasurer. Would the Treasurer advise the House of results of the indices of economic activity released by Westpac and the Melbourne Institute this morning? How do Australia's economic prospects compare with those of other countries?

Mr COSTELLO (Treasurer) —I thank the honourable member for Barker for his question. I can inform him that the Westpac-Melbourne Institute survey was released this morning and it showed that the annualised growth rate of the leading index of economic activity was 5.5 per cent in June, well above the long-term trend of 3.3 per cent. Westpac said that the index for June points to solid growth recovery in the Australian economy in the first half of 2004. That is a leading index which is designed to try and get some fix on prospects in some time to come.

The Australian economy through the course of 2003 has been under pressure from global downturn and of course the worst drought in Australia's recorded history. That has weakened exports and that has detracted from growth. It is welcome that the leading indicators point to the fact that growth will be picking up in 2004.

How does that compare to international forecasts? As TheEconomist records in its most recent edition, Australia is expected to lead the world in 2004 after leading the world in 2003. In TheEconomist poll of forecasters the August average has Australia forecast to grow at 2.8 per cent in 2003, leading all of the developed countries, and to grow at 3.5 per cent in 2004, again leading all of the developed countries. In 2004 we expect—indeed, we hope—that the US economy will begin its recovery.

One of the reasons why Australia has led the world, notwithstanding the drought and notwithstanding the global downturn, is the amount of reform that has been accomplished in this economy. As the OECD said: