Simon Crean (Hotham, Australian Labor Party, Shadow Minister for Trade and Regional Development) Share this | Hansard source

I move:

That the House:

(1)

notes that:

(a)

strong and sustained export growth is essential for long-term economic prosperity and for providing more rewarding, well-paid jobs;

(b)

despite the resources boom, Australia has been seriously and consistently underperforming in relation to its export sector;

(c)

Australia’s average annual export growth rate over the past ten years is half that recorded under Labor;

(d)

Australia has now experienced 60 consecutive monthly trade deficits—the longest period of trade deficit on record;

(e)

the Government has failed to double the number of exporters by 2006, as it said it would; and

(f)

at the same time, the Government has halved the level of financial assistance to Australian exporters; and

(2)

calls on the Government to urgently adopt a comprehensive trade strategy to address the underperformance of Australia’s exports.

Despite the resources boom and significant demand from China, Australia’s export performance under this government has been appalling. This motion highlights the government’s failure on trade, and my colleagues the members for Holt and Bendigo will be pointing to what this means at the local level. The reality is that exports have been underperforming because the government has not put in place the right policies to maintain our competitiveness or our productivity, and it is not just Labor that says this. In the Financial Review today an article by Adrian Rollins states:

A Committee for Economic Development of Australia report to be released today has found that export volume growth has virtually stalled, expanding by just 2.1 per cent a year between 2001 and 2006 ...

The article goes on to say that this is in contrast to growth ‘by an annual average of 7.3 per cent in the 1980s and 1990s’. Despite the resources boom and international demand, export growth in the past 10 years under the government’s watch has been only four per cent per annum. When Labor was in office it was eight per cent. Exports are a crucial part of the economy; they should make a positive contribution to the nation’s GDP. They did so in just about every year in which Labor was in office. In contrast, in just about every year this government has been in office exports have made a negative contribution, and the budget papers forecast that this year will see a further deterioration.

The government has also failed to meet the promise it made in 2001 to double the number of exporters, from 28,000, by 2006. The number of exporters is just 42,000 today, only halfway to that target. In all, this appalling trade performance has translated to 60 consecutive months of trade deficit. No government in the history of this nation has presided over such an appalling and consistently bad trade performance. Each trade deficit adds to our current account deficit, which in turn adds to our foreign debt. We remember John Howard’s debt truck, when he was seeking to become the Prime Minister of this country. He said he would reduce foreign debt. But foreign debt now amounts to half a trillion dollars. Of course, higher debt places upward pressure on interest rates, and that is why Australia has the second highest interest rates in the OECD. On the international competitiveness front, the International World Competitiveness Yearbook for 2007 shows that Australia’s ranking has fallen from sixth to 12th place.

Frankly, other countries are passing us by. It is interesting to look at how Labor was able to achieve stronger export growth when it was in office. It did it because it had a multifaceted approach to policy in this area. We had an integrated trade and industry policy; we put multilateral trade agreements—not bilaterals—at the forefront of our negotiations; we invested in skills, infrastructure and an industrial relations framework that linked wages growth to productivity and supported our trade export sector; and we adequately funded trade assistance. What we have instead is a government intent on getting political trophies through its free trade agreements, with the United States in particular. The three free trade agreements that this government has signed have seen the trade position deteriorate in every one of those countries. On the export assistance front, where Labor introduced the Export Market Development Grants Scheme and the International Trade and Enhancement Scheme, which saw a multiple effect—12 to 1 and 18 to 1 respectively from those investments—this government has not only abolished the ITES but also halved the total expenditure on trade assistance. Little wonder that we are seeing a halving of the rate in growth in exports. The services sector is another classic example where the government has failed to direct its energies. We need to return to the sorts of integrated policies that saw this country able to have exports contribute positively to GDP. (Time expired)

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