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Wednesday, 28 February 2001
Page: 24641

Mr SCHULTZ (2:45 PM) —My question is addressed to the Minister for Trade. Would the minister inform the House of the initiatives that have strongly contributed to ABARE's recent forecast of strong export performance?

Mr VAILE (Minister for Trade) —I thank the honourable member for his question. The good news in the forecast by ABARE yesterday is obviously going to be well received in the member for Hume's electorate. ABARE has forecast that total commodity exports are set to rise in the next 12 months by about 3½ per cent. On the back of some very good figures over the last couple of years, it is forecast that total commodity exports are going to rise from $86.3 billion to $89.3 billion, farm sector exports are going to rise from $24.2 billion to $27.5 billion in the next 12 months and mining sector exports are going to rise from $44.4 billion to $54.9 billion in the next 12 months. This is good news for the commodity sector of our economy. Export growth is driving our economy. Along with those statistics, manufacturing exports will continue to grow at around 12 per cent. Off the back of a very successful outcome from the Olympic Games held in Australia last year—we saw a surplus in the trade in services last year, a lot to do with the success of the Olympics—it sets a very good scene for Australia's export effort. One of the more important outcomes of the trade effort last year was that we halved the trade deficit from $16.5 billion to $7.3 billion as a result of a lot of the activities that were undertaken by Australia's exporters, and certainly that was being driven along by the good sound economic management of our government.

We have seen a lot of investment in the export sector of the Australian economy, which has helped. We do not deny that the exchange rate helps exports, but fundamental to a lot of the effort that has been undertaken has been sound economic management, the reform programs that we have undertaken and the removal of a lot of the tax burden from Australia's exporters. That makes them much more competitive in the international marketplace. That is an undeniable fact. We aim to continue to work with Australia's exporters to get them into new world markets and increase their presence in those markets. The sound economic management of the Australian economy has certainly laid the foundation for the forecasts outlined by ABARE yesterday as far as the future of our economy is concerned. The forecasts were underpinned by some comments made at the ABARE Outlook Conference yesterday by Mr Malcolm Edey, head of economic research at the Reserve Bank, who said:

(1) There is little sign of the sorts of imbalances that have curtailed growth in the past.

(2) Wage growth has remained moderate.

(3) Business profitability coming into the second half of 2000 was high.

(4) Interest rates have remained relatively low.

(5) Inflation in underlying terms is well contained.

(6) The Australian economy seems as well placed as could be hoped to weather a shift in international conditions.

That is a very strong signal to the Australian economy and Australian exporters for the future. The forecast of growth in exports is very good news for the commodity sector and for the broader exporting community in Australia. The only threat to that is the likelihood of a Labor government that would roll back a lot of the sound economic management principles that we have implemented over the last number of years and reimpose taxes on the export sector that the government has taken away, making Australian exporters so much more competitive in the international marketplace.