Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Hansard source

I thank the honourable member for Bowman for his question. I can inform him that today’s international trade in goods and services figures show that the trade deficit narrowed to $1.1 billion, led by an increase in exports of five per cent or $799 million. The rise in exports was largely due to a solid increase in commodities exports, although, of course, the impact of Cyclone Glenda, which hit the Western Australian coast in late March and early April, would still be depressing exports from the North West Shelf and from the Pilbara.

Over the past three years Australia’s mining industry has invested around $31.6 billion in increasing its productive capacity, and this will lead to an increase in export volumes over the course of the year and into next year. The RBA financial aggregates were also released today. What they showed was that business credit rose by 1.9 per cent to be 17.2 per cent higher over the year. This shows that business is borrowing solidly for investment but that it is in a very strong position in relation to those borrowings with the share of profits at near historical highs in the Australian economy. Conversely, household credit is slowing, rising by one per cent in April to be 12.8 per cent higher over the year.

What we see in these particular figures is an improvement on the export front. We see strong business investment in the Australian economy and moderating personal credit growth, which is consistent with the household sector slowing. This is important as the economy rebalances itself from domestic sources of growth to external sources of growth. Supported by a strong global economy over the years which are ahead, we should see that rebalancing continue.

Prospects for the Australian economy are strong. The government’s strong fiscal position is contributing to savings in Australia. The fact is that we have now reduced Labor’s $96 billion of net debt to zero and are saving $8 billion in interest payments, the important tax cuts which are due to take effect in July—

See this speech in context