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Monday, 30 March 1987
Page: 1447

Senator BUTTON —On 26 March Senator Lewis asked me a question about the profitability of Australian companies. I will provide him with an answer now, but I will not go to the detail of his question. The answer is as follows: It is correct that company profits before tax declined by 13 per cent in the calendar year 1986 over the calendar year 1985. The honourable senator, however, has chosen his period of reference with care as it fails to show the dramatic improvement in company profits in the December and September quarters of 1986-the latest period for which statistics are available. Company profits increased by 47 per cent in the September quarter and 19 per cent in the December quarter, on a seasonally adjusted basis.

It is not correct, as the honourable senator's question inferred, that manufacturing profit performance has been worse than that of the economy as a whole. The Australian Bureau of Statistics figures show that both aggregate and manufacturing company profits in the December quarter have reached their highest level since the beginning of the period covered by the series. This upturn in profits is welcomed and tends, with respect, to make nonsense of the honourable senator's reference to the absence of any benefits from the depreciation of the Australian dollar. The latest quarterly national accounts figures show a marked improvement in Australia's trade performance. Exports increased by 13 per cent in the December quarter 1986 and contributed most of the strong growth in gross domestic product.