Mrs HULL (2:50 PM) —My question is addressed to the Treasurer. Would the Treasurer inform the House of the economic data released today? What do these results indicate about the importance of consistent economic management?

Mr COSTELLO (Treasurer) —I thank the honourable member for Riverina for her question and acknowledge the work that she does on behalf of the electorate of Riverina. I inform her that today's balance of payments figures for the March quarter were released showing that the current account widened to $12 billion, or 6.1 per cent of GDP. This was driven by an increase in the trade deficit, which in turn was driven by strong growth in imports. Imports increased seven per cent in the March quarter and 16.6 per cent over the year. That is consistent with a strongly growing domestic economy.

Export volumes for the quarter rose 2.2 per cent—that is, they increased but they did not increase by as much as the import figures—with rural goods rising a strong 13 per cent in the March quarter. That was primarily due to a strong rise in the export of cereal grains. Grain exports have more than doubled over the year, reflecting last year's wheat crop and some recovery from the drought—although we would be foolish if we were to think that the effects of the drought have fully worked through or that the drought has broken.

What these figures suggest is that net exports will subtract 1.3 per cent from March quarter GDP growth. We have forecast, however, that as the domestic economy cools somewhat and the world economy picks up somewhat the position in relation to the balance of payments will improve—that is, Australia will not be bringing in the import rise that it has in the last year, and markets for our exports will increase over the course of the year.

Net foreign debt in the March quarter was at 47.9 per cent of GDP. The Statistician has released a news release just in the last minutes indicating that the percentage figures in table 33 in the actual publication are wrong. He has revised that figure down to 47.9 per cent, which is lower than it was as a proportion of GDP in December 2002 and March 2003. So in proportionate terms net foreign debt has declined. Retail trade figures, which were released today, show that the value of retail trade was unchanged in the month but was 7.4 per cent higher over the course of the year. Combined with the easing of activity in the housing sector, this is consistent with slowing of domestic demand.

This figure of 6.1 per cent of GDP on the current account is certainly not the worst current account that Australia has had, but we do not want to be complacent about it. The current account deficit is high. As I said earlier, we are forecasting over the course of the year, with demand slowing domestically and the world economy picking up, that those figures should improve. But anyone who imagines that all of Australia's economic challenges are behind us would be wrong. We have significant economic challenges. Add to that the world oil price and rising interest rates around the world and it is going to take quite considerable economic management in Australia over the next year or two. In particular, it is going to take considerable consistent economic management.

Running the Australian economy is not like running a municipal council. It takes a considerable skill. One has to have sophistication in relation to economic management. The thought that a failure in running a local council could somehow qualify one for running a national economy is spectacularly false. It is a difficult business. It does require consistency. It is not the kind of thing that one can pick up from political advisers' books or the latest download in relation to Google. It is something that takes disciplined economic management. The people of Australia require that disciplined economic management because the future of their jobs and their businesses relies upon it.