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Tuesday, 15 October 1985
Page: 1211

Senator VIGOR —I ask my question of the Minister representing the Treasurer. In the light of the trade figures announced yesterday which showed a deterioration in the September balance of trade-exports fell by 7 per cent and imports rose by 3 per cent in seasonally adjusted terms-will the Minister explain how he believes Australia's disastrous current account deterioration will be reversed in the future, given that the devaluation is not having the anticipated effect of narrowing our trade deficit? Since exports decreased by 7 per cent in seasonally adjusted terms, does the Minister believe that more assistance should now be given to our exporters, rather than the $80m cut in assistance achieved by the export market development grants scheme amendment passed in the Senate last week? Given the reduction in the value of the dollar which is likely to follow these trade figures, will the Government insulate home buyers from the consequent increases in domestic interest rates by maintaining the ceiling on home interest mortgages?

Senator WALSH —When virtually the same question was asked a couple of minutes ago Senator Vigor had already given me notice of this question. I did not expect that he would be deterred from asking it because essentially the same question had been asked immediately beforehand, so I saved some of the answer for this one. I am not sure what a home interest mortgage is, so I find it a bit difficult to answer the last part of the question. Perhaps I can answer in more general terms. In regard to the external current account deficit, there are two ways in which that could conceivably be closed-by increasing exports or by reducing imports. The Government announced in May a decision effectively to increase exports by increasing the charges applied to non-Australian Development Assistance Bureau foreign students in Australian tertiary institutions. I understand that the Australian Democrats will oppose that Government policy which would make some contribution, albeit small, to closing that current account deficit which so concerns Senator Vigor.

Senator Peter Baume —How much con- tribution?

Senator WALSH —This year it is about $10m. In regard to the September figures, the decline in exports in September needs to be seen in the context of the figures for the previous two months. July exports appeared to be adversely affected by industrial disputes and therefore, not surprisingly, there was a very large increase in July over August. The September result, in seasonally adjusted terms, represents a 4.4 per cent increase over the average for July and August and in this regard could be seen as a healthy result. I do not think there is much more I can say other than to refer Senator Vigor to the answer which I gave Senator Parer. In response to the last part of the question, the Treasurer has already stated that the Government will be maintaining the ceiling of 13 1/2 per cent for all banks on interest which may be charged on housing loans, usually secured by a mortgage against the property.