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Foreign debt near record.

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Media Release


TELEPHONE: (02) 6277 4803 ! FACSIMILE: (02) 6277 8496

31 May 2002


The rise in foreign debt to close to its record high is yet another blow to Treasurer Peter Costello’s hollow claims of sound economic management.

In 1995 as shadow treasurer, Costello described the then net debt figure of $180 billion as ‘an all-time bad record for Australia’ and said this translated into ‘$10,000 for each man, woman and child in Australia.’ How then does he explain that under his stewardship Australia’s net debt now stands at more than $17,000 per man, woman and child?

Mr Costello has demonstrated over the last couple of weeks that he has trouble coming to terms with the ‘D’ word. His state of denial about the Budget deficit is compounded by the release of today’s net foreign debt figures.

The Australian Bureau of Statistics reports Australia’s net foreign debt has increased to $332 billion for the March Quarter 2002, an increase of $140 billion since he became Treasurer in March 1996 -- just shy of his record $334 billion in the March quarter 2001.

Paralleling the increase in net foreign debt, the level of household debt has spiralled, more than doubling since he became Treasurer.

The RBA Governor’s hint today that interest rates are set to continue rising is an ominous sign for Australian families, which have been forced to borrow increasingly large sums of money to finance the Australian dream of owning their own home.

Further information: Robert Garran (02) 6277 4803, 0419 692 504