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Tuesday, 25 November 2003
Page: 22713

Mr KATTER (2:47 PM) —My question is to the minister representing the Minister for Trade. Is the minister aware that interest rates are currently one per cent and 0.002 per cent in the United States and Japan whilst in Australia they are five times higher at five per cent? In light of the soaring Australian dollar, resulting from the Reserve Bank's failure to restrain this gap, would the minister agree to discuss worsening implications for exporters with western and northern local government leaders? Further, would the minister agree with the statement from Charles Burke of the NFF that a 3.7 per cent rise in the Australian dollar costs farmers $426 million a year? If so, would the minister agree that the loss to Australia's exporters, farmers and miners would now be exceeding $25,000 million a year? Finally, could the minister outline what measures the government is looking at to restrain further appreciation of the dollar and the consequent worsening of the deficit on the current account, which was described by former Treasurer Keating as at banana republic levels when it was $11,000 million—

The SPEAKER —The member for Kennedy—

Mr KATTER —I am finishing, Mr Speaker; I have one sentence to go—and by our current and esteemed Prime Minister as the `overwhelming economic problem' when it was $26,000 million but which now stands at $42,000 million?

Mr DOWNER (Minister for Foreign Affairs) —I thank the honourable member for Kennedy for his question. As the honourable member knows, for some years now—since, from recollection, 1983—the Australian dollar has been on a floating exchange rate. It was floated by the Hawke government, as one of its early initiatives, towards the end of 1983. Bearing in mind that we have a floating exchange rate, ipso facto there are weeks when it is higher and weeks when it is lower against a variety of different currencies.

In recent months, we have seen a significant depreciation of the United States dollar against a wide range of currencies, including the Australian dollar. It is worth observing, though, that the United States dollar, on the contrary, appreciated very substantially over a number of years as a result of international perceptions, particularly about the United States's technological lead over other countries. There has been a correction of that in the international marketplace. The market will find its way.

The government's attitude to trade is that we make the most of the international environment we have to deal with. Unlike the Labor Party, which believes that the only trade policy that is acceptable is a WTO negotiation, and whilst we support the WTO negotiations, we, for our part, are looking to get better access in a range of additional markets for the sorts of exporters that the honourable member refers to. We have a free trade agreement with Singapore and we have a free trade agreement now with Thailand, which is a wonderful achievement by the government. I acknowledge the role the Prime Minister played at the end of those negotiations with Prime Minister Thaksin.

Finally, unlike the Labor Party, we support negotiating a free trade agreement with the United States, which again offers, potentially at least if the negotiations are successful, tremendous advantages to our exporters. That is the best thing for Australia to do in these circumstances, as well as continuing with our Export Market Development Grants program and support from Austrade.