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Tuesday, 15 October 1985
Page: 1233

Senator SHORT(4.29) —I move:

That the Senate take note of the paper.

In the few minutes available to me I wish to confine my comments on the annual report of the Department of the Treasury to what I see as the need for better economic growth statistics in Australia. I am concerned about the increasingly misleading nature of certain of our key measurements of economic growth. I refer particularly to gross national expenditure, or GNE, as a measure of economic growth. In recent years an increasing part of GNE has been on deficit financed public administration and community services. This has had the effect of bloating the figures for the growth of GNE that the Government provides. The Treasurer (Mr Keating), for example, uses GNE figures as support for his fatuous claims that he has somehow defeated the business cycle. Gross national expenditure should no longer be taken to reflect the growth of the true growth potential, or the rise in national productivity and living standards.

I would like to see the Treasury and the Australian Bureau of Statistics consider the preparation and publication of a measure of what I would call private domestic product which, in my view, would better reflect the genuine productive potential of the national economy. The definition of this concept, PDP, would be total gross domestic product in real terms, minus public administration, defence, community services, ownership of dwellings and customs duty adjustment. These items reflect wealth-using expenditures and not wealth-creating, productive, activities. The growth trend of PDP and PDP per capita has had a pronounced downward kink since about 1973.

On a per capita basis, private domestic product-that is, in effect our private productive potential-grew by only 0.8 per cent per annum over the decade to 1982-83, compared with 3.1 per cent per annum in the decade 1962-63 to 1972-73. More recent figures than those for 1982-83 are not yet available. This sad fact appears to indicate that the Australian statistics system reflects the public interest in spending and a lack of interest in production. Whilst the bloated gross national expenditure figures are published with a time lag of only about four months, statistics for gross domestic product by industry are published after a lag of one or two years.

I am indebted to Professor Wolfgang Kasper of the Royal Military College, Duntroon, for suggestions which formed the basis of my brief remarks today. I hope that professional economists and the relevant government authorities, including the Treasury, will give these suggestions careful consideration in the interest of providing a more accurate statistical guide to economic growth and productive potential in Australia.

Question resolved in the affirmative.

The ACTING DEPUTY PRESIDENT (Senator Tate) —Order! The time for the consideration of Government papers has expired.