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Fall in $A threatens jobs in South Australia



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M E D I A R E L E A S E S E N A T O R T O N Y M E S S N E R

S H A D O W M I N I S T E R F O R

-V A U S T R A L I A

F I N A N C E A N D T A X A T I O N

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T H E SENA T E 31/85

FALL IN $A THREATENS JCBS IN SOUTH'. AUSTRALIA

IT IS IRONIC THAT CONTRARY TO GOVEFNMENT EXPECTATIONS, THE CONTINUING . UNCONTROLLED DEVALUATION OF ΊΗΕ $A HAS, IN FACT, LED TO A WORSENING OF THE TRADE BALANCE. EXPORTS IN SEASONALLY ADJUSTED TERMS HAVE FALLEN 12% AND EXPORTS IN ΊΗΕ MANUFACTURING SECTOR HAVE FALLEN BY BETWEEN 15 and 20%. THE PROJECTED

DECLINE IN THE DEMAND FOR IMPORTED GOODS WAS SUPPOSED TO INCREASE THE DEMAND FOR OUR LOCALLY PRODUCED GOODS.

SENATOR TONY MESSNER, SHADOW MINISTER FOR FINANCE AND TAXATION WAS SPEAKING CN THE IMPACT OF THE FALL IN THE $A TODAY.

"THE GOVERNMENT HAS OVERLOOKED FACTORS WHICH MAKE A NONSENSE OF ITS PREDICTED DECLINE IN DEMAND FOR IMPORTED GOODS AND PROSPECTS FOR A MANUFACTURING INDUSTRY LED CORRECTION TO OUR ABYSMAL CURRENT ACCOUNTS DEFICIT.

"THESE FACTORS HAVE PARTICULARLY DIRE CONSEQUENCES FOR SOUTH AUSTRALIA, ESPECIALLY IN THE MOTOR VEHICLE AND HOUSEHOLD APPLIANCE INDUSTRIES.

"THE INCREASED COSTS OF IMPORTED COMPONENTS USED IN LOCAL MANUFACTURE HAVE ACTUALLY INCREASED THE COSTS OF DOMESTICALLY PRODUCED GOODS, WHILE IMPORTERS ARE ABSORBING LOSSES GENERATED BY THE FALL IN THE $A, AND NOT INCREASING THEIR PRICES, TO HOLD ONTO THEIR SHARES OF THE MARKET.

THIS MEANS THAT DESPITE THE GOVERNMENT'S PREDICTED INCREASE IN THE DEMAND FOR DOMESTIC PRODUCTS, WE WILL SEE A LIKELY FALL IN DEMAND FOR LOCALLY PRODUCED GOODS, IN A CLIMATE OF RISING INFLATION.

IT IS CLEAR THAT THIS GOVERNMENT'S DANGEROUS ECONOMIC POLICIES ARE PUTTING JOBS IN SOUTH AUSTRALIA'S MANUFACTURING INDUSTRIES ON THE LINE." -

CANBERRA 17 NOVEMBER 1985

ENQUIRIES: MR MICHAEL WEST (062) 727111

REPRESENTING IN THE SENATE THE SHADOW TREASURER AND SHADOW MINISTER FOR IMMIGRATION AND ETHNIC AFFAIRS'