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Capex figures expose coalition investment myth



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^ Media Release ^ « 2 ^ * Hon Gareth Evans QC MR Deputy Leader of the Opposition and Shadow Treasurer

C a p e x F ig u r e s E x p o s e C o a litio n I n v e s tm e n t M y th

Today's capital expenditure data from the Australian Bureau of Statistics provide further evidence that Labor left the economy in fundamentally good shape.

Total new capital expenditure rose by 2.7 per cent in the March quarter and investment expectations for the coming year are strong.

However, the figures give the lie to the Coalition's claim that the prospect of massive Budget cuts would have a major positive impact on business investment plans.

Data collected by the ABS before Labor left office showed a 27 per cent increase in expected new capital spending for 1996-97 (in the first estimate, compared with the same estimate for 1995-96).

Today's data, collected after the Government announced its intention to cut government programs and hack into public services, show only a 20 per cent increase in expected new capital spending for 1996-97 (in the second estimate, as compared with the same estimate for 1995-96).

That's a 25 per cent decline in the expected rate of increase of investment spending.

Where is the big extra boost to private investment intentions promised by the Government? What the figures show is precisely the contrary.

While Australia's economy is in good shape, more growth is needed if further progress is to be made reducing unemployment. But instead of boosting employment growth, the Government's plans to massively cut government spending will do nothing but create more unemployment.

Canberra 23 May 1996

COMMONWEALTH PARLIAMENTARY LIBRARY