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Tuesday, 17 March 1987
Page: 764

Senator MACKLIN —I ask the Minister for Finance whether it is true that since the deregulation of the financial system the level of overseas borrowings by Australian companies has increased to such an extent that in the last 12 months loan repayments equalled the entire income of the Australian meat and sheep industries, or of our minerals and metals industries. Does the Government consider that the level of overseas borrowings by private companies and the purposes to which those borrowings are put constitute a major problem for Australia's external debt and that immediate intervention by the Government to regulate such borrowings is necessary?

Senator WALSH —I did not get all of the question down. Part of the question was whether the purposes to which the funds are put are a major contributor to our present current account deficit problem. It is not so much a question of the purposes. There are two possibilities. The current account deficit is an entirely separate issue and I thought I had explained that during the last session in such a way that even the Australian Democrats should have been able to understand it.

Senator Chaney —Maximilian Walsh does not agree with you.

Senator WALSH —No. Maximilian Walsh, in his latest incarnation, as I note in the Sydney Morning Herald, is now a bourgeois left populist. Having previously been a ratbag right populist, he is now a bourgeois left populist. Insofar as those borrowings encourage a casino mentality in Australia and Australian business, they are in my view quite damaging. They are not, however, the cause of our current account deficit. If the high amounts which the sellers of shares receive are spent on Mercedes cars, world tours, French wines or indeed any luxury imported product that would not otherwise have been purchased, that does marginally aggravate our current account problem. That too is to be deplored. The `fairies at the bottom of the garden' party and the ratbag left, of whom the latest spokesman appears to be Maximilian Walsh, believe that they can wave away our current account problems with a magic wand by neatly reversing cause and effect; that is, by saying that the cause of our current account problem is overseas borrowings whereas overseas borrowings are an effect of our current account problem. Before people in the Opposition look too smug and nod their heads too much I think I ought to add that equally reprehensible, equally snake oily, is the view being touted by the Leader of the Opposition and his acolytes that living standards can be maintained, and even increased on average, through tax cuts. That is just a different brand of snake oil, the brand of snake oil being touted by the bourgeois left.