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Wednesday, 12 October 1983
Page: 1640


Mr BLANCHARD —I refer the Treasurer to the statements by the Deputy Leader of the Opposition last week to the effect that the Prime Minister is deluding himself about support from the business community for the economic policies of the Government. In light of his recent trip to a meeting of the International Monetary Fund and to Europe, can he inform the House of the attitude of the international business community to the economic policies of this Government?


Mr KEATING —My attention was drawn to remarks made by the Deputy Leader of the Opposition last week in a poor attempt to disparage the economic record of this Government and also to attempt to humiliate the Prime Minister by suggesting that he was deluding himself about support from the business community for the economic policies of the Government. The honourable gentleman inquired about the reaction of people abroad, the international business community, in respect of the economic policies of the Government. I indicate to the House that a high level of interest and enthusiasm was expressed by senior business people abroad with regard to Australia. Indeed, leading bankers expressed overwhelming support for the way the present Government is managing the Australian economy. On a number of occasions the Australian economy and Australia were referred to as the jewel of the international capital markets.

Bankers everywhere seem keen to be associated with debt issues by such a prime borrower. This, of course, was best demonstrated last week in the Eurodollar bond issue which showed that the yield to investors that Australia was able to achieve was up 66 basic points below comparable United States Treasury's and had the finest yields and longest maturities of any borrower in the market in recent years. Just a couple of days later Canada let an issue in the same Eurobond market and found that the yields were slightly less fine than those which are issued to Australia. I think that I can go so far as to say that at the moment Australia is the prime sovereign borrower in the world. This is very much in distinction not only with the remarks made by the Deputy Leader of the Opposition but also in reports which I saw last week of a survey taken by a journal.

Domestically there are a number of indications of support, of growing consumer confidence, particularly support which has been given to the Government by representatives of business and business groups. The Confederation of Australian Industry-Westpac survey showed a revival in business confidence and a brighter outlook in respect of its respondents who expect new orders and output to expand significantly in the December quarter. Also the general business outlook was expected to improve in the next six months. In the words of that survey it was ' a more optimistic result than any for the last two years'. The same can be said for the Victorian Chamber of Manufactures survey which showed significantly improved trends for production, employment, forward orders, sales and capacity utilisation for the current quarter. The Melbourne Institute of Applied Economic and Social Research survey, which was given fairly wide publicity, indicates general consumer optimism which that body indicated was the highest for more than two years. Need I say to the Deputy Leader of the Opposition that the all ordinaries index of the stock exchange is up almost 40 per cent on the level that it was at when the Government came to office.

I contrast those facts with the response abroad by the international business community. I was at the signing of our Eurodollar loan with the Deutsche Bank and the associated banks. Not only are they the most prestigous group of banks in the world but also the rates offered the finest yields and had the longest maturities that we had seen for a long time. I also note that in my absence the Chief General Manager of Westpac, Mr Bob White, who runs the largest trading bank in Australia, said that the Hawke Government's record was better than the Fraser Government's. He was 'more than happy with the new Labor Government since it came in' and was 'agreeably surprised' with my good self. The Government had been flexible whereas Mr Fraser had been a 'hardened regulator'. In an editorial last Friday the Australian observed that Mr White's view was more than just flattery. It stated:

It is a view shared by a good many other people in the business and financial community.

Of course, again there was no basis to the mealy-mouthed attack upon the economic policies and standing of this Government. We are held in the highest view abroad. Indeed I had to restrain some of the enthusiasm which was directed towards us. On the domestic front the capital inflow, which does pose some problems for monetary management, is an overwhelming vote of confidence by international investors and the international community in Australia. I think this point was again driven home the other day by David Potts in the Australian. He took the Deputy Leader of the Opposition to task over what is clearly demonstrable. Whether it is capital inflow, the all ordinaries index, attitudes abroad, Eurodollar loans or surveys, they all show that the records and policy of the Australian Government have very much the support of business both at home and abroad.