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Peter Reith

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DEPUTY LEADER of the OPPOSITION PRESS RELEASE SHADOW TREASURER

REPORT FROM WASHINGTON

The Shadow Treasurer, Peter Reith MP, said today that there was considerable confidence among both commentators and senior White House officials that the American recession would not be too savage.

Speaking from Washington where he is currently on an American government sponsored study tour, Mr Reith said the general expectation was that the recession in the United States would last until mid year but it would be relatively mild.

"Although many commentators believe that the 1990 fourth quarter result of -2.1% (s.a.a.r.) was understated, the Administration expects the downturn to be less adverse than the average post war recession," Mr Reith said.

"One well known senior economist described the recession as 'an ordinary garden variety recession'.

"The point is, despite the figures and the Gulf crisis, there are confident expectations here that this recession will not be protracted."

During the last week, the Shadow Treasurer has spoken to many of the American government's senior economic officials. They include:

. Dr Sidney Jones, Assistant Secretary for Economic Policy, the Treasury

. Mr Ahmad A1 Samarrie, Chief Economist, Office of Management and Budget

. Jules Katz, US Trade Representative

. Governor David Mullins, Vice Chairman (Nominated), Federal Reserve System

. Dr Charles Schultze, Director of Economics, Brookings

. Dr Herbert Stein, American Enterprise Institute

. Hon Bill Archer (Republican, Texas), Ways and Means Committee

. Hon Sam Gibbons (Democrat, Florida), Ways and Means Committee, Chairman of Trade Sub-Committee, Joint Committee on Taxation.

COMMONWEALTH } P A R L IA M E N T A R Y LIBRAR'i I MICAH

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On the trade front, Mr Reith said it was disturbing to hear that protectionist sentiments are building in Washington. Messrs Kerin and Blewett have written to the US Secretary for

Agriculture voicing their concern over the US proposal to remove the export enhancement program ceiling for wheat of $US425 million.

"At this stage, that protest is not expected to be successful and the Australian government should double its efforts," Mr Reith said.

"Members of Congress and the White House will be subject to greater pressures for protection as unemployment increases.

On the Gulf war, Mr Reith said Australia is highly regarded and our commitment in the Gulf is certainly appreciated by those who are aware of our military presence.

"Bob Hawke's personal support for the US is known and, although the fact that Australia does not have ground troops or aircraft in the Gulf has not gone unnoticed, our standing as a good ally is readily acknowledged."

Mr Reith's discussions in Washington have also covered the banking system, asset price deflation, the federal deficit (now expected to exceed $US300 billion), education and productivity.

30 January 1991 Washington

Contact! David Turnbull (06) 2774277 D7/91