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Unthinkable $17 billion deficit on the cards for 88-89



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DEPUTY LEADER OF THE OPPOSITION

COMMONWEALTH PARLIAMENTARY LIBRARY MICAH

37/89

UNTHINKABLE $17 BILLION DEFICIT ON THE CARDS FOR 88-89

The April current account result confirms the failure of the Hawke/Keating economic policy.

So absolute has their failure been that in-the-red figures in excess of $1 billion a month are now greeted, in some

quarters, as almost "good" news! Looking ahead, there is little prospect of significant improvement.

A previously unthinkable $17 billion deficit now seems a likely outcome for 1988/89.

The Government's latest last-ditch strategy - the April tax/wages package - does nothing to improve the situation because it does nothing to improve the competitiveness of Australian industry. The reality is that because it

promises higher money wages without related productivity improvements, inflation will jump, eroding the value of the wage rises and actually worsening competitiveness. The package is a recipe for a widening trade deficit and

accelerating debt.

The Government must immediately implement policies which increase efficiency and productivity. Urgent reform is needed on the waterfront, in coastal shipping, and in the labour market, to name just a few areas which impinge directly on the competitiveness of Australian producers.

But so far the Government has only demonstrated its capacity to procrastinate and to dilute reform measures to placate vested union interests.

By not addressing these areas of inefficiency which cost Australian producers and consumers hundreds of millions of dollars every year, the Government seems to be saying it is content to see this country plunge further into debt, that

it is happy to buy illusory growth at tomorrow's expense in the forlorn hope of saving its political skin.

But Australians are already experiencing the pain of the Hawke Government's cynicism, and they - like increasingly wary foreign investors - will not be so easily fooled.

PERTH 16 May 1989 Contact: Keith Kessell (09) 325 8179