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Tuesday, 2 October 1984
Page: 1011

Senator HEARN —My question is directed to the Leader of the Government in the Senate. Do the recent retail sales figures for the month of July, released by the Australian Bureau of Statistics, confirm that retail sales are picking up in line with the general economic recovery? Could the Minister comment on the implications of the July retail sales figures?

Senator BUTTON —Surprisingly enough, the answer to Senator Hearn's question is yes. But because members of the Opposition would no doubt like to be better informed than that, I propose to accede to the second part of her question and elaborate on the figures released by the Bureau. Let me say first of all that the Bureau's figures are based on several adjustments that it has made to improve the accuracy of the retail sales indices. The 3 per cent seasonally adjusted increase in July over August is further confirmation that the economic recovery has been maintained. It represents an 8 per cent improvement on the July figure for 1983. If one looks at the figures for the quarter as distinct from these for the month of July, they are also encouraging. The figures for the three months ended July recorded an increase in sales of 1.3 per cent over the previous three-month period, compared with an increase of only 0.1 per cent using the same comparison to June.

The retail sales indices offer as a general rule an early warning system for subsequent increases in manufacturing activity. It is not surprising that the recent Confederation of Australian Industry-Westpac Banking Corporation survey of business expectations indicated that businesses are now more confident than ever about economic conditions in the future. As I recall the figures, the CAI- Westpac survey showed a 33 per cent return, indicating optimism and confidence about the economy, compared with--

Senator MacGibbon —That is three out of 10, Senator.

Senator BUTTON —Yes, I understand. Thirty-three per cent is also five higher than 28, which was much higher than it was for any period in the last two years of the previous Government. The 33 per cent figure for the September quarter showed confidence in the general improvement in the business situation. More importantly, the CAI-Westpac survey showed a great improvement in business expectations of increases in capital expenditure over the next 12 months. These are the most optimistic findings of this survey in the past three years. Should these plans in fact eventuate, the increased investment is likely to strengthen further the base for a sustained and long term economic recovery. I should also say, because it might provide a preliminary answer to a question I will no doubt be asked about the Australian Bureau of Statistics production figures for the month of July, which were disappointing, the figures for the preceding months were very satisfactory. The Government hopes and believes that when one examines the retail sales expectations those figures for that month will be aberrant and indicate no downward trend when there has been a consistent upward trend.

I make the point that nobody in the Government has pretended that there has not been patchiness in the overall economic recovery, but as we climb, as it were, the stairway to light after the dark ages of the Fraser Government, there will always be difficult steps along the path, and we have acknowledged that. It is important that we continue to make progress. The indicators suggest that we are.