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Balance of payments



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Deputy Leader of the Opposition Parliament House Canberra, A.C.T. 2600

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D72/85

NEWS RELEASE BY JOHN HOWARD M.P.

BALANCE OF PAYMENTS .

Today's balance of payments figures demonstrate that there is no room for complacency about the Australian economy.

Certainly there has been a slight turn-around in the trade account - no doubt due to the depreciation of the Australian dollar. -

But the current account is heading towards a deficit of between $10 and $11 billion by the end of the financial year. This compares with Mr Keating's Budget estimate of about $8 billion.

These figures underlie the necessity for the Government to adopt appropriate economic policies in response to the biggest depreciation of the Australian dollar that has occurred in the

last thirty years. ' ' · ’

A depreciation is not costless. It demonstrates that an adverse assessment has been made on the Australian economy by world markets. ,

But certain benefits do flow to our export and import producing industries as a result of the depreciation.

This competitive advantage will only be retained if the - Government acts to prevent cost increases resulting from the depreciation being passed into increasedwages through full indexation. ~

In particular the Government should indicate that it will argue before the Arbitration Commission for the discounting of wage indexation to take account of the increase in the Consumer Price Indexation stemming from the depreciation.

13 May 1985