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ANZ report highlights the slump in savings



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DR HARRY EDWARDS MP Member for Berowra ACTING SHADOW TREASURER

TEL 02 476 3675 FAX 02 476 6462

FOR RELEASE: EMBARGOED UNTIL 12.01 AM WEDNESDAY 8 JULY 1992

ANZ REPORT HIGHLIGHTS THE SLUMP IN SAVINGS

The ANZ Savings Report published overnight has focussed attention yet again on Australia's poor performance on the savings front.

The report, which shows that Mr Keating's recession has left both public and private savings at historically low levels, raises very serious concerns about where the savings will come from to fund the expansion in investment if real jobs are to be provided

for the million unemployed.

This report, highlighting as it does the low levels of savings in both the private and public sector, has a dire warning for Australia's unemployed.

In a nutshell the report tells us Mr Keating's recession has already forced people to dig very deep into their pockets just to survive, and the public sector has just borrowed, borrowed and borrowed again.

Obviously, against this bleak background the question is: how can we finance the investment necessary to create jobs?

The first quarterly ANZ Savings Report found:

* the fall in national savings is "...deeper and more

prolonged than in the last recession in 1982-83...".

* the fall in national savings of 1.2 per cent in trend terms during the March quarter was the fourth consecutive quarter of national dissaving.

* private savings fell to a record low of one per cent in

trend terms in the June quarter of 1991, and has remained low since.

* public sector savings fell by 3.4 per cent in trend terms

in the March quarter this year - the fifth consecutive quarter of public sector dissaving.

COMMONWEALTH

PARLIAMENTARY LIBRARY MICAH

2

The Government has done nothing to address Australia's chronic lack of savings.

Indeed, as Treasurer Dawkins, and Finance Minister Willis confirmed only today, the Keating Government has contributed to the run-down in public sector savings with their massive budget deficit blow-out to $9.4 billion.

The $9.4 billion deficit is nearly double the original estimate included in the 1991/92 budget, and represents a staggering turnaround of $17.4 billion in only two years.

That is a budget deterioration of Whitlamesque proportions.

The starting point for next year is more likely to be $12 billion than the official estimate of $10.5 billion that the Government is publicly clinging to.

The official estimate of a starting point deficit of $10.5 billion takes no account of Labor's pre-election spending spree.

Mr Keating thinks he can put Australia's future on Bankcard.

The Coalition's Fightback! package of reforms with $13 billion in the bottom line, however, will significantly strengthen the Government's financial position.

Moreover, the lower taxes, the Tax-Free Savings Scheme, and the proposed Retirement Saving Accounts, not to mention the large and equitable incentives for voluntary superannuation, outlined in Fightback! will encourage the private sector to save.

Not only will Fightback! provide incentives for business to invest and create jobs, it will provide the incentive to save to fund our investment - and begin to contain Australia's vast foreign debt.

Contact: David Turnbull (06) 277 4277