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Wednesday, 18 February 1987
Page: 241

Mr SINCLAIR —I ask a question of the Prime Minister. He would be aware that this morning's foreign debt statistics show that Australia's gross foreign debt has increased from $36,000m in June 1983 to $101,000m in September 1986. Does this mean that the rate of increase in Australia's gross foreign debt is over $1,300 every second, $78,000 every minute, $4.6m every hour and $111m every day? Would it now require every man, woman and child in Australia to pay over $6,250 each in order to pay off this debt? What is the Prime Minister's excuse for this appalling trebling of our foreign debt during his term of office?

Mr HAWKE —It could be inferred from the observations of the temporary Leader of the National Party of Australia that this is a matter of recent origin. As anyone who understands the economic realities knows, the position is that the current trade and debt difficulties have built up over a long period and will take a considerable period to resolve. The simple truth is that it will take more time to resolve the problems because the previous Government, the Government of which he was a member, simply did not have the foresight to put in place the policies that would revitalise Australia's secondary and service industries. Indeed, if we want to attribute blame, the Party above all which should be blamed is the National Party. The National Party was the Party which, on the one hand, talked about the need for reduced protection, to reduce the burden on the people it allegedly represents in rural areas, but in the whole period that the coalition was in government it made sure that there was erected in this country unsustainably high tariff barriers and imposed upon the people it allegedly represents a burden that they should not have been asked to carry. Behind those sorts of barriers it was impossible in this country to develop the sorts of secondary and service industries which could be both import competitive and take their place in the export markets of this world. The National Party preferred the easy course, the course of hiding behind the resources boom. As my friend the Treasurer said yesterday, the former Government got $3 billion worth of easy money from oil. Did it use that sensibly to address the very question that the Leader of the National Party has raised? Of course it did not. It left a legacy of neglect and contempt for the interests of this country, which is right at the heart of the question raised by the Leader of the National Party.

When we address this question, we need to recognise two things: Firstly, that the sharp deterioration of Australia's terms of trade over the past two years and the subsequent depreciation of the Australian dollar are significant factors in the growth of the external debt to which the Leader of the National Party referred. I ask the Leader of the National Party whether, in the midst of trying to save his position, he is capable of understanding some simple economic statistics. There is one statistic that he ought to have very well in his mind, which is that last night the National Party branch of Glen Innes, in the middle of his electorate, met and passed a 100 per cent vote of confidence in Joh Bjelke-Petersen. That is a statistic which will be worrying him more than his confected latter-day concern for Australia's external debt.

I ask the Leader of the National Party to note this simple fact. Nearly 50 per cent of the growth in gross external debt since June 1984 can be attributed to the devaluation effect of the depreciation. Secondly, I ask him to note the fact that Australia has substantial holdings of official reserves and private assets abroad, so that the net indebtedness figure he talked about is $80 billion, of which the net Commonwealth debt is a mere $8 billion. Most of the rest of the debt is in the private sector, as a result of economic decisions which have been taken by the private sector of this country. I repeat that the net Commonwealth debt is a mere $8 billion. This Government has in place monetary, fiscal, industry and wages policies which are appropriate to redress the external account imbalance.

The Opposition will not be impressed by these facts as stated, but perhaps it will be impressed by the fact that in the assessments made by Moody's Investor Services Inc. and Standard and Poor's Corporation, both recognised in their statements that the policies in place under this Government were the appropriate policies to address this problem. That fact is not only recognised by the relevant international forums and agencies but is also recognised increasingly by the Australian electorate, which is becoming increasingly bemused and confused by the posturings which pass on the other side of this place for policy making.