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Tuesday, 22 September 1987
Page: 451

Mr HOWARD —I ask the Prime Minister: In view of the fact that the Treasurer will address the annual meeting of the International Monetary Fund (IMF) in Washington next week, does the Prime Minister share Senator Walsh's view that another commodity price slide will see the IMF knocking on Australia's door?

Mr HAWKE —No. Of course I normally do not answer hypothetical questions, Madam Speaker, as you know, but let me make this point: neither I nor any other responsible commentator is predicting an imminent further terms of trade collapse. The important thing for the present I would suggest, as I have repeated for some years, is, as I said at Surfers Paradise on 26 August:

The past few years have served to highlight the structural weaknesses in the Australian economy and its vulnerability and inflexibility in responding to external shocks. From day one my Government has set about tackling those weaknesses, through both macro-economic and micro-economic policy tools.

Fundamentally the task demands attitudinal change. As such it is a task which government cannot successfully perform alone. It is one which requires the understanding and application of the whole community.

Having said that and having endorsed it again today let me note that the Australian people have shown a very commendable capacity, under the leadership of this Government, to do the things that are necessary to cope with those economic realities. I would have no doubt that, were the very unlikely event of a further catastrophic decline in our terms of trade to occur, we would as a nation do the things that would be necessary to meet that challenge-as we, as a nation, so magnificently did in the terms of trade collapse of 1985-86.

I think it is not inappropriate to remind the Leader of the Opposition that the Treasurer made quite clear in his actual Budget Speech his awareness of the continuing challenge confronting this country. The Leader of the Opposition, as has become his wont, is quite incapable of quoting accurately when he seeks to make his attacks upon members on this side of the House. I have had the opportunity of reading the transcript of his rather pathetic Press conference this morning. Of course, he misquoted the Treasurer. He has the Treasurer talking about the new golden age when the Treasurer in fact was referring to a golden age of economic change. Indeed, that was an accurate statement by the Treasurer, particularly when we contrast the tremendous achievement and redirection of the Australian economy under this Government with the poverty of decision-making and direction under our predecessors.

I want to point out in this context that the Treasurer, in his actual Budget Speech, signalled quite clearly and unequivocally the need for the nation to understand the longer term nature of the challenges confronting it. Let me quote from page 3 of the printed Budget Speech. The Treasurer, after talking about our very considerable achievements, rightly said:

They have exceeded the expectations of almost everybody.

It is very appropriate that the Leader of the Opposition should be reminded that the Treasurer also said:

Madam Speaker, as successful as we have been, the magnitude of our trading problem is such that we still have a long way to do.

The big trade deficits since the early 1980s have built up a substantial foreign debt burden.

Our external deficit, although falling, remains too high.

To reduce permanently our debt burden we must go further in reducing our dependence on overseas savings by lifting the level of Australian savings.

It is quite clear that the Treasurer was perfectly and properly aware of the longer term nature of these problems confronting the Australian economy. As for his attendance at the IMF meeting, when he goes there he will be welcomed, as he has consistently been welcomed from 1983, as an outstanding Treasurer, a Treasurer who has produced change in this country which is beyond either the concept or the delivery capacity of those opposite. It will be a welcome which will be consistent with what was said by overseas commentators and markets during the election campaign: they hoped and trusted that Keating would return as Treasurer in a Hawke government and they expressed their unbridled concern that, in the election, the control of the Australian economy should fall into the hands of the Leader of the Opposition. Fortunately, the good judgment of the Australian electorate mirrored the judgment of those overseas.