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Monday, 10 September 1984
Page: 691


Senator SIBRAA —Has the Minister representing the Treasurer seen a report in today's Australian that an influential business think-tank based in New York indicates that according to an international economic survey Australia's economy is expanding faster than the economies of the other major Western countries and is running at a pace far stronger than the relatively mature United States' recovery? Can the Minister comment on the accuracy of the growth rates indicated in the survey?


Senator WALSH —Yes, I have seen the report. I think Senator Sibraa indicated that Australia has the fastest growth rate of any industrialised country. I believe that is correct. The facts show that. However, I am not sure of the derivation of some of the figures quoted in the Australian. For example, the table published shows that Australia's annual growth rate is 15 per cent. I do not know whether that was obtained by multiplying the figures for one quarter by four-in which case a figure of that order could have been produced-and if so what quarter it was. So in the absence of the original report, there are many uncertainties regarding the methods by which the figures published were derived.

There is also a reference to an economic performance index. Again, I do not know precisely what that means, and it is not defined in the Press report. I would expect, however, that it measures more than productivity growth and probably incorporates, for example, interest rates and the rate of inflation or, more importantly, changes in the rate of inflation. However, leaving that aside, from objective Australian evidence it is a matter of public record that for the 12 months ending June 1984 real economic growth in Australia was above 10 per cent. On a year on year basis for the same year it was between 5 and 6 per cent. It is correct that the farm sector, which experienced a major recovery in 1983- 84, contributed more than it normally would to the total 10 per cent growth over the last financial year. But even after that is taken out, real non-farm growth for this year ending June, as against the year ending June 1983, was still above 8 per cent. There has been a dramatic turnaround in the economy since this Government came to power. It contrasts, I think, with the three consecutive quarters of negative growth over which the previous Government had presided during its last year in office. Therefore there was negative growth over the entire year.

That rate of 8 per cent is the fastest rate of growth that has been recorded in the Australian economy for more than 20 years. Those who were always confident about the prices and incomes accord would not be surprised. Those who were not confident or did not support the accord would find it even more remarkable that that dramatic growth rate was accompanied by an equally dramatic fall in the inflation rate, which if measured by the consumer price index shows a fall of more than 50 per cent and if measured by the implicit price deflator shows a fall of some 40 per cent.