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Exports decline and trade deficit increases again.



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MEDIA RELEASE

KEVIN RUDD M.P. Shadow Minister for Foreign Affairs, Trade and International Security 4 October 2005

EXPORTS DECLINE AND TRADE DEFICIT INCREASES AGAIN

After nine long years in office, continued economic complacency from the Howard Government has produced a record annual trade deficit, a record current account deficit and record foreign debt.

On the management of Australia’s external account, the Howard Government wins, gold, silver and bronze for non-performance. But this is the sort of trifecta Australia cannot afford to win.

ABS figures released today reveal that Australia racked up a trade deficit of $1.6 billion in August on the back of a worrying 3 per cent decline in exports.

Australia has now recorded 46 consecutive monthly trade deficits - continuing the woeful trade performance of the Howard Government.

Exports of rural goods fell 3 per cent with significant declines in meat (down 13 per cent) and wool/sheepskins (down 33 per cent), while non-rural exports fell 5 per cent with declines in mineral fuels (down 21 per cent) and coal, coke and briquettes (down 4 per cent) despite record prices.

Month after month the Howard Government breaks record after record of dismal failure and under achievement on the export front.

In addition to 46 consecutive monthly trade deficits the Howard Government has achieved:

• A record annual trade deficit of $25.5 billion; • A record current account deficit of $57 billion; and

• A record foreign debt of $430 billion.

This dismal record has been achieved at a time when the external trading conditions for Australia have never been better.

Global economic growth remains strong and the prices received for Australia’s commodity exports remain at record highs.

Despite those propitious circumstances, Australia is seriously underperforming on the export front.

The Howard Government’s failure to grow exports at a faster rate has contributed to our record current account deficit and record foreign debt.

In his latest report, HSBC economist John Edwards says that to stabilise Australia’s net foreign debt we must achieve a trade surplus of 1 per cent of GDP.

After 9 long years, the Howard Government has not come close to achieving a trade surplus on an annual basis and our foreign debt continues to climb as a result.

The Howard Government’s complacency on the export front unnecessarily exposes Australia to any sudden external economic shocks.

Australia needs a NEW EXPORT STRATEGY to once again achieve rapid export growth and to get our foreign debt under control.

Trade Gap Blow Out

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Sourc e: ABS 5368.0; s a

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Exports

Imports

The Growing Trade Gap

Ends. 4 October 2005

Media contact: Alister Jordan 0417 605 823