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

I thank the honourable member for Tangney for his question. I can inform the House that the balance of payments figures for September 2006 were released today. They showed a narrowing of the current account deficit, which has fallen to around 4.9 per cent—possibly less—of GDP, which is significantly lower than forecast in the budget, at 6.25 per cent. The good news is that in current price terms exports increased 1.3 per cent in the quarter and in current price terms imports fell 2.5 per cent in the quarter. The improvement in the trade deficit more than offset the rise in the net income deficit, which was driven principally by the fact that foreign corporations are deemed to repatriate profits that they make in Australia, particularly mining companies.

Net foreign debt increased to $522 billion in the September quarter, but only a very small part of that is held by the Commonwealth government—5.1 per cent, compared to 17.2 per cent in the March quarter of 1996. The Commonwealth is not borrowing in net terms; it is issuing growth securities in Australia. Some of those securities would be bought by foreigners. That is the only way in which the Commonwealth would hold any foreign liabilities at all. Importantly, the debt servicing ratio is at 9.8 per cent in the September quarter, well below the peak of 20 per cent, in 1990.

One of the intriguing matters that has been going on over the last 24 hours is the ‘guess the shadow Treasurer’ competition. We still have not had an announcement. I think the member for Lilley still formally holds the post. Members would have seen footage of the member for Lilley at a dinner with fellow roosters last night—one of those dinners where there were more bottles of wine on the table than people sitting up for the meal. It looked like it was going to be a bad night in roosterville last night. There had been a coup in the coop—what they call a ‘coop d’etat’. And the guessing game continues as to whether the ‘coop d’etat’ will lead to the member for Melbourne or whether it will lead to the member for Lalor—

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