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Foreign debt initiative applauded



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P A R L I A M E N T O F A U S T R A L I A

H O U S E O F R E P R E S E N T A T I V E S

SHADOW MINISTER FOR INDUSTRY, TECHNOLOGY AND COMMERCE

JOHN HOWARD, M.P. MEMBER FOR BENNELONG

NEWS RELEASE

ITC 1/89

FOREIGN DEBT INITIATIVE APPLAUDED

I applaud the initiative of the Business Council of Australia to convene a summit on the issue of Australia's overseas debt.

I especially welcome the focus given by business leaders to the crucial need to improve productivity if our debt levels are to be stabilised and ultimately reduced to manageable proportions.

There can be no salvation on the debt front without a giant leap forward in productivity. Australia's high debt levels flow directly from our meagre trade performance which, more than anything else, is a creature of low national productivity.

Time and time again Australian exporters and local producers competing against imports are beaten to the punch not by the "sweated labour" of low wage economies but by the superior productivity performance of high wage countries.

There are a myriad of reasons for low productivity ranging from absurdly restrictive work practices to a lack of flair by many business managers.

Rapid reform on the micro economic front and at a much faster pace than at present is a fundamental requirement of any successful productivity campaign.

We must also concentrate heavily on those industries where Australia enjoys a comparative advantage.

Facing a debt overhang of more than 30 per cent of GDP we can ill afford the folly of such outcomes as that of the Wesley Vale pulp mill. That would have been the largest manufacturing investment in Australia's history. It would have given us a precious value-added

capacity thus saving hundreds of millions of dollars off our trade deficit.

It is an accepted fact that resource related manufacturing contains some of our most promising opportunities for the future. .

Successfully confronting our foreign debt challenge through lifting our productivity is plainly the most important economic task before us.

15 November 1989 SYDNEY

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