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Howard parties, Australians pay.

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Wayne Swan MP Federal Labor Shadow Treasurer

5 March 2006

Howard Parties, Australians Pay

Every hour that the champagne corks were popping to mark ten years of the Howard Government this week, Australia notched up another $3 million IOU with international money lenders.

That's how much our foreign debt has increased on average each hour since John Howard became PM - a staggering average of $77 million dollars a day.

New foreign debt data released last Tuesday showed Australians now owe foreign money lenders $473,000 million dollars.

This equates to just over half the value of the Australian economy - everything we produce from January to June each year.

Tuesday’s bad news on foreign debt was compounded by an announcement on Friday that January’s trade figures were the worst in Australian history. Australia has now clocked up 46 consecutive trade deficits.

It didn’t get mentioned on the cocktail circuit this week but the Howard Government has seen foreign debt rise by more in the last three and a half years than during the entire thirteen years of the last Federal Labor Government.

In the last two year's alone it's jumped by more than $100,000 million.

Australia’s spiralling foreign debt is especially concerning given the fact that our mineral export prices are at an all time high.

The interest bill alone on Australia's foreign debt last year was $22.4 billion or an average of $61 million a day. That's up 40% in just two years.

In 1995 Peter Costello himself drew the link between high levels of foreign debt and the risk of higher interest rates:

“A high level of foreign debt...makes Australia more vulnerable and increasingly at the mercy of international financial markets. ... because Australia has a current account problem, that puts premium on Australian borrowings, that flows through and every Australian pays for the consequences.”

To start reducing our foreign debt Australia needs to lift exports and to do so we have to become more competitive. Then we really would have something to celebrate.

5th March 2006 Contact: Lachlan Harris 0414 957 765