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The naked Treasurer: GST has mugged the economy.

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The Hon Simon Crean MP

Deputy Leader of the Opposition and Shadow Treasurer


6 March 2001

The Naked Treasurer: GST has mugged the economy

Westpac today stripped away the final shred of deceit surrounding Peter Costello's claim that the GST would be anything other than a boon for the Australian economy.

"While high interest rates and energy prices have impacted both series, the GST effects in Australia have pre-empted the US weakness."

The Westpac Composite Index finds the GST has pre-empted the slowdown in the US economy, with economic activity now below Asian crisis levels.

Everything Peter Costello has said about the GST from its supposed benefits to the economy and jobs to the way it would boost the dollar have now been debunked.

Today's ACCI-Westpac survey of industrial trends for the March Quarter 2001 revealed:

  • A continued fall in business confidence;
  • A decline in output yet again;
  • A decline in new orders;
  • A sharp decline in exports to the lowest reading in the 1990s except for the Asian crisis;
  • A decline in capacity utilisation; a decline in the profits outlook for the next   12 months to make up the worst profits outlook since 1990-01;
  • A squeeze on profit margins;
  • A continued poor outlook for business investment;  and
  • A continued soft employment outlook.

Today's figures accompany:

  • the largest year on year decline in the ANZ job ads series in a decade;
  • the ABS Composite Leading Indicator which points to a decline in growth since the GST was introduced;
  • business surveys from Dun and Bradstreet pointing to worsening business conditions;
  • National Australia Bank surveys pointing to a slowdown in activity;
  • A decline in the Westpac-Melbourne Institute leading indicator of economic growth;
  • A pitiful investment performance with the average annual growth rate of real new private capital expenditure over the last three years a disappointing minus  5 per cent (compared to 15 per cent in Labor's last three years);
  • The first consecutive quarters of year on year decline in retail sales volumes in nearly a decade;
  • The largest year on year decline in building approvals since at least 1984;
  • The largest decline in building work down since John Howard was last Treasurer;
  • Record foreign debt of $301 billion;  and
  • 87,300 full-time jobs lost in the last four months with the average annual growth in employment under Peter Costello just 1.79 per cent (compared to 3.1 per cent in Labor's last three years).

And all this from a GST that was supposed to boost the economy.

With backflips a plenty in the last three weeks, as his Prime Minister has asserted his authority over his hapless Treasurer, how long now before this Treasurer is dragged kicking and screaming to admit that the GST has mugged the economy.


Further information:  Stephen Spencer (02) 6277 4045(w),  (0419) 695 435