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Transcript of doorstop: 4 March 2003: Parliament House, Canberra: trade deficit; current account deficit.

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CRAIG EMERSON Member for Rankin


Transcript of Doorstop Craig Emerson, Shadow Minister for Innovation, Industry and Trade Parliament House, Canberra, 4 March 2003

Trade deficit; Current Account Deficit

Emerson: Another day, another deficit, more debt. Australia’s $1.4 billion trade deficit is adding to our record current account deficit and our record $354,000 million of debt. This is the 14th successive trade deficit. The Government’s blaming the drought, but an analysis of the figures reveals that Australia’s non-agricultural exports have fallen in the last twelve months.

Next, the Government blames an international economic slowdown, but our merchandise exports to our dominant trading partners, the East Asian region, have fallen five per cent in the last twelve months. If you want to use the Trade Minister’s preferred measure, in this last month compared with the corresponding month of the previous year merchandise exports to East Asia have slumped nine per cent.

It’s about time the Government got out of its complacent mood. It’s about time the Trade Minister stopped congratulating himself for trade deficits, when he said last month that the $3 billion record trade deficit showed that there was investor confidence in the Australian economy. He must be the only Trade Minister in Australia’s history who celebrates trade deficits - now, 14 trade deficits in a row.

The Government cut the Export Market Development Grants scheme when it came into office. The Government cut the R&D tax concession. As a result of this and other measures, the growth in Australia’s exports of sophisticated manufactured goods has slumped 60 per cent under this Government. Has slumped 60 per cent. The Government should stop its delusional back-slapping,

Contact: Craig Emerson 0418 781 386 or Brendan Shaw 0413 013 501


recognise that we have a very large trade problem and a very large current account problem. It should re-engage with our major trading partner, East Asia, instead of concentrating on a trade deal with the United States - which, as revealed by the Trade Minister yesterday, will not be a free trade deal at all - and it should work hard to restore our battered relations with East Asia.

Journalist: But, Mr Emerson, the trade deficit did narrow between December and January quite significantly.

Emerson: This is the 14th trade deficit in a row and, to borrow the Treasurer’s language back before this Government was elected, it’s no good forecasting a disaster and then congratulating yourself for achieving it. He accused the previous government of being smug and complacent. This Treasurer is the king of smug, he is the king of complacency.

Journalist: Yeh, but what’s that got to do with an improvement in the trade deficit between December and January? We saw in December a $3 billion deficit, in January a $1 billion deficit.

Emerson: The January figure is $1.4 billion and, if you have a look at the trend figures and the graph associated with my media release, have a look at the ABS figures, you’ll see a widening deficit. Rather than a narrowing deficit, on a trend basis this deficit is widening alarmingly. If the Government wants to congratulate itself for a widening deficit, it is letting down the Australian people and jeopardising future job prospects of Australian families.

This is not a cause for celebration, it is cause for alarm, because it is the 14th successive deficit. Australia’s export performance in 2002 was the worst in 50 years, since the 1956 Melbourne Olympics. Now that is a very bad result and the Government needs to start addressing this problem now because the trade deficit is detracting from economic growth.

The building approval figures today are also down. That’s for the fifth month in succession. On a trend basis, the trade deficit is widening and building approvals continue to fall. Both of those are

going to detract from future economic growth.