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Monday, 23 February 1987
Page: 416

Senator SHORT —Is the Minister representing the Prime Minister aware that Australia's accumulated balance of payments deficit on current account since the Hawke Government came to office now exceeds $40,000m, equivalent to more than $8,000 for each Australian family, and that its continued growth is inevitable so long as the Government persists with those policies which have led to the highest relative inflation and interest rates in our history, as well as the highest levels of taxation, government spending and government borrowing? Is it a fact that Australia's foreign debt, as a proportion of our gross domestic product, is now at the crisis level of 34 per cent, compared with less than 10 per cent in the late 1970s, and that the current level of the debt, $101 billion-or $20,000 a family-is forecast by the Economic Planning Advisory Council and the Business Council of Australia to increase to between $140 billion and $160 billion within the next four years? In these circumstances, why will the Government not give a commitment to an immediate mini-Budget as a first essential step in the process of taking the necessary policy measures to reduce Australia's crippling balance of payments deficit?

Senator BUTTON —A number of questions are wrapped up in Senator Short's main question, designed, I suppose, to give it a bit of colour. Let me make just a couple of points about that. I do not know how a man of Senator Short's alleged erudition can refer to policies leading to the present situation. Let me look briefly at the overseas debt situation and the current account problem. Senator Short's comparison was with the late 1970s. If he looks at the private sector component of the national debt, he will see an enormous leap at the end of the 1970s. The reason for that was the resources boom which was so magnificently talked up by Ministers in the Fraser Government and which led to an enormous increase in private sector overseas debt.

Senator Short —I am talking about the debt increase in the past few years.

Senator BUTTON —I understand that. Let me make a second point in relation to that. Part of the increase in the debt in the past few years has been because of the very sharp decrease in the value of the Australian dollar. That lends some dramatic quality to the figures. In contrast to a government which was in office for seven years, the former Prime Minister of which has said that the dollar was deliberately overvalued in order to keep inflation down-that is what he says about the seven years of his Government-but which still ran double digit inflation for its entire period of government. That is the sort of problem this Government inherited.

The only point to Senator Short's question, without having some lengthy debate about these issues, was to ask whether the Government will have a mini-Budget. I have said on a number of occasions-I am quite happy to repeat myself to Senator Short-that if the Government decides to have a mini-Budget, or a May statement, or whatever it might be called, it will make that decision and inform people about it at the appropriate time.

Senator Chaney —That is a good non-sequitur-if you decide, you will make a decision.

Senator BUTTON —I am sorry; I am very bitter about being caught up in technical deficiencies in the English language. I concede the honourable senator's point. If the Government reaches a decision-I think that is better put-it will announce it, and Senator Short and everybody else who has asked this question in the past week will be beneficiaries of that announcement.

Senator SHORT —I ask a supplementary question. Am I to take it from Senator Button's answer that he does not agree that a foreign debt which constitutes 34 per cent of Australia's gross domestic product does constitute a crisis? If he does not agree that that constitutes a crisis, what on earth does he need to convince himself of the need for immediate action to be taken?

Senator BUTTON —If Senator Short wants to characterise that as a crisis, he will. As I said last week, crisis is foremost in the mentality of the Opposition because it has a series of crises on its hands. What is disappointing about the implication of Senator Short's question is the sort of hip-shooting quality about it-that is, we have a crisis and if we have a mini-Budget that will in some way resolve it. That implication is a lot of rubbish.

Senator Chaney —He said `a first step'.

Senator BUTTON —No, he did not say `a first step'. He said nothing about a first step. I have said here on numerous occasions that the current account crisis and the national debt problem of this country, if one wants to characterise them in that way, have been years in the making under conservative governments, and they will not be unmade quickly. No responsible commentator thinks that. The implication of Senator Short's question is that he thinks that. If Senator Short reads-perhaps he does not read, I do not know-he will see that, time and time again, responsible economic commentators have said that it will be a medium to long haul to recover that situation, an expression they have got from Ministers of this Government, and that the Government is proceeding in the right direction. We will continue to do so.