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Wednesday, 12 February 1986
Page: 172


Senator Dame MARGARET GUILFOYLE —I ask the Minister for Finance whether the reports in today's Press are accurate in their anticipation of a worsening of the current account deficit. Is it expected that the figures to be released later this week for the January balance of payments will reveal another large current account deficit? Further, in the light of all the economic indicators, does the Minister still predict that the Budget forecast for a $4.9 billion deficit remains on target?


Senator WALSH —Frankly, I have no idea whether the newspaper predictions about the current account deficit for January are correct. However, it is known that there will be some very substantial aircraft purchases in January or possibly February which will cause a short term distortion-a one-off increase in our monthly deficit. On the other question of the Budget projections, as Senator Dame Margaret Guilfoyle well knows, it is true that because of the Australian dollar's value being somewhat lower than had been assumed in the Budget figuring, so far this year anyway, outlays will be higher than they would otherwise have been. There have also been some decisions taken by the Government since the Budget was introduced which have increased outlays, and other decisions virtually imposed on the Government by the courts which have increased outlays. But at this stage it is too early to say whether an increase in outlays in some areas will lead to a net increase in outlays. Likewise, even a net increase in outlays will not necessarily mean an increase in the deficit if it is matched by an increase in revenue. In addition, the lower value of the Australian dollar has probably had some positive effects on the revenue side.