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Australia's trade deficit blows out again.



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MEDIA RELEASE

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

10 January 2006

AUSTRALIA’S TRADE DEFICIT BLOWS OUT AGAIN

Australia’s trade deficit blew out to a massive $2.5 billion in November, the second largest deficit recorded so far for 2005 and the fourth largest trade deficit of all time.

Under the Howard Government Australia has not balanced its trade account for the past 44 months. Despite robust global economic growth, record commodity prices and our best terms of trade for over 30 years, Australia is experiencing its worst trade performance on record. Given foreign debt is now at a record level, what will happen if global economic conditions start to get tough?

Australia’s export performance is weak in every sector except those touched by the Chinese resources boom. Services exports remain weak, with travel, tourism and transport exports all declining by 1 per cent in November.

On top of that Australia continues to rack up record import growth - hitting an all time high of $17.6 billion in November.

The clearing of the backlog of imports following the Government’s disastrous introduction of the new import processing system contributed to the import blow out in November but it is not the only cause. Imports have been growing strongly since November 2004, reflecting the Australia’s declining competitiveness against global producers.

It is clear that Australia must develop a NEW EXPORT STRATEGY.

But the Government refuses to recognise the exports crisis and it has no new ideas or solutions to address the increasingly unsustainable situation of our trade account.

One practical step the Trade Minister can take is to seek greater export market access for Australian sugar growers to the United States under the US Free Trade Agreement when he meets with his US counterpart in March to review the US FTA.

Mr Vaile sold out Australian farmers in the US FTA for his own political gain. US farmers got access to 100 per cent of Australia’s agricultural market. Australian farmers got far less access to the US market.

The March meeting provides Mr Vaile with the opportunity to correct his some of his failures on the FTA and start addressing the underlying crisis in export performance.

Ends. 10 January 2006

Media contact: Alister Jordan 0417 605 823