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National Accounts Figures Shatter 'one nation' illusions

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Senator Jim Short

SMF 73/92


Today's National Accounts for the June quarter and 1991/92 are further evidence that Labor's One Nation' forecasts are worthless and therefore have no validity.

The Prime Minister confidently asserted in 'One Nation' that through year, growth in GDP for 1991/92 would be 2.75%, but it turned out to be only 1.6%. He was wide of the mark by over 40%.

That is why the community has no confidence in his other 'One Nation' projections. Neither do the financial markets.

The slight glimmer of hope in GDP growth of 0.6% for the June quarter and 1.6% for 1991/92 must be tempered by the fall in private capital expenditure of 0.4% for the quarter. This is the twelfth consecutive quarterly decline. Investment in plant and equipment is now 32% below that of the March quarter 1989.

It is not hard to see why. Corporate retained earnings - an important source of savings and investment - went backwards bv $5.341 million in 1991/92, the third consecutive year they have been negative. It is simply not possible for companies to invest and employ more people when they are running out of funds.

Due to the Government's slide into massive budget deficit, gross national savings have collapsed from $76.2 billion in 1989/90 to $67.0 billion in 1990/91, to $59.9 billion in 1991/92. Nothing could more graphically underscore the culpability of Labor in causing the tragic level of unemployment we are now experiencing.

With a Budget deficit of $13-$14 billion looming for 1992/93, and the Government further eroding the nation's savings, any cyclical recovery which may occur could be quickly snuffed out by a capital shortage. A recovery will not be sustainable unless a large proportion of the present expenditure on private consumption and public sector spending is diverted to private investment.

The growth projections contained in 'One Nation' clearly are now impossible. So are the promised tax cuts. So are the prospects of Labor setting the scene for genuine productivity growth and employment.

This Government has run its course. The community knows that. The financial markets know that. It is time to go before more damage is done.

Canberra 13 August 1991 pa rlia m entary LIBRARY


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