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Six years anniversary for Vaile in trade: cancel the party pies.

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KEVIN RUDD Shadow Minister for Foreign Affairs, Trade and International Security


Today is the sixth anniversary of Mark Vaile’s appointment as Australia’s Trade Minister. Unfortunately, in terms of Australia’s export performance, there is no cause for celebration.

Mr Vaile has presided over Australia’s worst export performance since the end of World War II. The figures say it all:

• Australia has now recorded 43 monthly trade deficits in a row - the longest run by any Australian government. • Australia has recorded annual trade deficits for the past six years - including our largest ever trade deficit last year of $23.5 billion. • Export volumes have been flat for the last four years right across the board -

commodities, agriculture, manufactures and services. • Net exports have now made a negative contribution to economic growth for four years in a row - another dismal record. • Australia’s share of world exports is now at a historically low level - falling

every year under Mr Vaile’s watch. • This has generated historically high current account deficits - including our largest ever current account deficit last year of $54 billion. • A record level of foreign debt at $425 billion.

This performance has occurred despite strong global economic growth, historically high commodity prices and our best terms of trade in 50 years. Access Economics said recently “the best global growth in a generation is passing us by”.

Mr Vaile’s performance stands in stark contrast to Labor’s record:

• Annual export growth under the Howard Government of 5.3 per cent is less than half of Labor’s achievement of 10.8 per cent.

• The performance on all manufactured exports is even worse - 13.7% per cent under Labor compared to 3.7 per cent under the Howard Government. • If exports continued to grow at the rate achieved by Labor, Australia would have recorded a trade surplus last year of $12 billion rather than a deficit of $26 billion

- that is a $38 billion turn-around.

After nine long years the Howard Government still has no clear-cut export strategy.

It has lost sight of the important role exports can play in driving economic growth.

It has relied on debt-financed domestic consumption and government expenditure to shore up economic growth and ignored the contribution exports can make.

This is a risky and unsustainable approach. The resulting record current account deficits and foreign debt expose Australia to any sudden downturn in global economic growth or adverse shifts in international investor sentiment.

The Government’s failure to invest in infrastructure, education, skills, R & D and innovation has undermined Australia’s productivity and international competitiveness, further exacerbating our export performance.

On his sixth anniversary, Mr Vaile needs to assess where he has gone wrong and to articulate a strategy aimed at rebuilding and diversifying export growth in the Australian economy.

Ends. 20 July 2005

Media contact: Alister Jordan 0417 605 823