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Business investment desperately needs a kickstart



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Ian McLachlan

Shadow Minister for Indust and Commerce

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BUSINESS INVESTMENT DESPERATELY NEEDS A KICKSTART.

Today's figures on business investment show that Australian industry is continuing its investment strike, the Shadow Minister for Industry and Commerce Ian McLachlan said today.

The figures, show a decline of 1.8 per cent in corporate investment for the September quarter of 1992.

Since the peak of the June quarter 1990, manufacturing investment has now fallen by 22.7 per cent.

'The analysis reveals that the fall in investment has been broadly based, with 11 of the 12 manufacturing industries reducing investment in the past two years.

'Textiles and wood, wood products and the furniture industries recorded the largest falls.

'More importantly, the analysis predicts that 'the decline in investment has not yet bottomed,' whilst acknowledging that 'demand will need to improve before sustainable improvements in investment can occur.'

'Business investment in new plant and machinery has been on strike for more than two years now, reflecting the lack of confidence in the Australian economy.

'Quite simply, private and corporate confidence has been crushed by high interest rates, accumulated debt, and the boom and bust roller coaster which has been the hallmark of this Government.

'Last week, Mr Keating said that 'the corporate sector has not been, investing enough,' and that 'increased investment is the key to economic expansion and the key to higher

employment.'

'The Coalition's proposed investment allowance which is worth $2 billion to industry in the first -year gives business the sensible kickstart required for investment, and therefore permanent employment.'

Further information: Ian McLachlan, Shadow Minister for Industry and Commerce, Telephone; 08 2377140. 16 February, 1993.

COMMONWEALTH PARLIAMENTARY LIBRARY MICAH