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Wednesday, 13 November 1985
Page: 2095


Senator VIGOR(5.03) —Mr Acting Deputy President--


Senator Archer —I move:

That the business of the day be called on.


The ACTING DEPUTY PRESIDENT (Senator Elstob) —Order! Senator Archer, Senator Vigor had already risen.


Senator VIGOR —Despite the fine words from Senator Richardson, in 1973 Australia was ranked as the twelfth largest exporter in the world but by 1983 it had dropped to the twenty-third ranked exporter in the world. Today, we are dropping fast to aroung the twenty-seventh ranked exporter in the world, only two years later. However, not only have our exports failed to keep pace with the growth of world markets but also an increasing proportion of our export earnings is not available to benefit the Australian economy because this country must meet the mounting capital repayments and the interest obligations on our massive foreign borrowings. Thus, the availability of export earnings to finance imports has been reduced, not only by the increase in import prices but also by the rapid rise in repayments and interest obligations resulting from Australia's heavy borrowings in international markets-borrowings which now stand at over $52 billion.

In the 1974-75 financial year our export earnings were $8,726m. Interest and principal repayments stood at $1,006m. For the financial year 1983-84 our exports earned $24,766m in the world market-place and interest and principal repayments stood at $7,746m. In other words, our export earnings had increased threefold while the cost of servicing our foreign debt had increased sevenfold. In the last financial year export earnings totalled $30,717m and interest and principal repayments increased to $11,537m. The trend continues.

In the light of the disastrous figures for the October current account and balance of trade deficits, who would be confident that Australia will ever trade itself out of the predicament in which we have been placed by both the Hawke Government and its predecessor the Fraser Government. It may take years for us to trade our way out of this deficit, and in order to do so we need direct action. Since I came to this House, as the Australian Democrats spokesman on trade I have often spoken about the urgent need to turn around the course Australia is following. The signs have been there. The warnings have been given. However, they have fallen on deaf ears. Mr Keating and his advisers can no longer refuse to see the signs or heed the warnings which have been given. Our trade situation must be improved if we are not to proceed down the path followed by Argentina and other South American economies. We have a number of problems.

Before I turn to the disastrous October current account deficit figures released yesterday, and the balance of trade figures I will make a brief comment on how Australia is placed in comparison with 12 other Western developed economies, including the United States, Britain, Asian and European countries. The figures are horrifying. Over the last quarter Australia has had the highest inflation rate of the 12 countries. The rate is double that of the next highest country, Italy. Australia's inflation rate is almost treble that of Japan, one of our major trading customers. No wonder our dollar is losing value. Australia experienced the fastest decline in its exchange rate in 1985 of all those 12 countries. The trade weighted index of Australia's dollar now stands at 60.3, its lowest ever. We have the fastest increase in money supply of the 12 countries. Australia has the highest interest rates of those 12 countries. Now Australia has the highest real interest rates since the Great Depression in the 1930s. I ask the Senate: Is worse to come? Australia's gross overseas debt now stands at $68.5 billion-33 per cent of gross domestic product-or $4,400 for every man, woman and child in this country. We are trapped in a vicious cycle of debt, over spending, falls in the value of the dollar, upward pressure on interest rates, inflation and increasing wages. Yet Senator Richardson tells us that we have never been better off. We must ask the Government for concerted action to get us out of this mess, if we still can.


The ACTING DEPUTY PRESIDENT (Senator Elstob) —Order! The time allowed for discussion of the matter of public importance having expired, I now call on government papers.