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Costello's blow-out in trade figures: worst ever.

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Hon Gareth Evans QC MP

Deputy Leader of the Opposition and Shadow Treasurer


4 May 1998

Ref. 75/98


Costello’s blow-out in trade figures: worst ever


Just one week before he delivers his third Budget, Peter Costello has given us the wors t ever blow-out in Australia’s trade figures.


With a massive $1.3 billion deficit for March, we are careering towards a current account in crisis.


This month’s enormous deficit comes on top of huge trade deficits of $460 million in February, more than $600 million in January, and more than $800 million in December.


If monthly balance of payments figures were still published - showing the net income deficit as well as the trade deficit - they would show Australia in the red in March by more than $3 billion. If we don’t see any improvement we’re heading for a current account deficit of more than $30 billion, well over 6 per cent of GDP, next year.


Given the scale of deterioration recent months, it is impossible to believe Peter Costello can meet his current account target of 4¼ per cent in next week’s budget.


This was the Treasurer who swore before the last election, “the first thing we’ll do is... deal with the current account deficit.”


This is the Treasurer who cried national crisis over the Coalition debt truck. And the same Treasurer who said Australia would never get high growth with “a massive road block — the current account deficit.”


Today’s disastrous trade figures are desperate confirmation of Peter Costello’s failure to protect Australia from the Asian crisis — and the figures will get worse when the full impact hits us.


An extraordinary feature of this month’s figures is that exports to our Asian trading partners actually rose, with the exception of Japan and Hong Kong.


There can be little doubt that exports to most of our Asian partners will deteriorate in the months ahead, as the full effect of the region’s financial crisis flows through to the real economies.


Peter Costello has failed to deal with current account. He has failed to deliver high growth, and the prospects for growth and jobs can only get worse in the year ahead.


Contact: Margot Marshall 0419 497 103