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Tuesday, 23 August 1994
Page: 16

Senator CAMPBELL (3.10 p.m.) —The point I make is that these ministers—the Leader of the Government in the Senate in particular—are quoting quite selectively from the statistics on Australia's economic performance. It is absolutely fantastic that Australia is achieving growth because it is offering some hope to some people that life may be better this year than it was during the years of the recession that we had to have. One of the reasons why interest rates are doing the things they are, why Australia has one of the highest interest rates in the OECD, why average Australians are doing it tough at the moment and tougher than their friends in England, Germany or the United States is that this government is spending money hand over fist.

  The Economist magazine of 6 August 1994 stated that one of the reasons for this is that even with the highest rate of growth in 1994 in Australia and a prediction for continuing strong growth in 1995—even though those growth figures are good—our current account deficit as a percentage of GDP is getting worse. We are entering a strong phase of growth as are countries such as Canada, France, Germany, Japan and USA, which are all recording strong growth in the four to 4 1/2 per cent range, but let us look at Australia's performance on current account as a percentage of GDP. It is minus 3.7 per cent for this financial year and will actually increase next financial year. Other nations are managing their economies more prudently than ours. Canada, for example, is reducing its current account deficit as a proportion of GDP from 3.5 per cent to 2.9 per cent. Germany is reducing its current account deficit from 0.9 to 0.6. I repeat that Germany, with its massive economic problems—having taken in Eastern Germany and while trying to pick up the economy of that area—is still able to reduce its current account deficit as a proportion of GDP.

  Japan has been suffering lower growth than it has been able to sustain in recent years—almost a recession, with growth rates of 1.5 per cent to 2.6 per cent predicted, and pump priming being the order of the day in that country at the moment. However, Japan is still managing to reduce its current account deficit from 2.8 per cent to 2.2 per cent. In the United States where growth is around 4 per cent to 3.6 per cent over the next two years, even under the Clinton administration that country is able to reduce its current account deficit. So we are in this boom period where one would think the government would be able to get its deficit under control, but the massive growth of GDP, our current account deficit is increasing. People who under this government are paying mortgages and increased interest rates must wonder why the government is prepared to spend their money and take that freedom away from them. In other words, people have to pay more money out of their own pockets to live in their own home, whereas the government is not prepared to use the same stringency when it is spending other people's money.

  This economy is being managed poorly. It is a time of high growth. It is a time when we should be saving for a rainy day. It is a time when we should be spending money in investment and not squandering it on high current account deficits, as this government continues to do.