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

I thank the member for Shortland for her question. I can advise that the Australian Bureau of Statistics released the June quarter current account figures today and they show a current account deficit of $12.8 billion for the June quarter, compared to a deficit in the March quarter of $19.8 billion. This has come about despite the slowing global economic growth. In these figures we have seen a 20 per cent increase in our export earnings; some $9 billion growth in that offset by only a three per cent increase in what we have paid for our imports. These figures still at 4½ per cent of GDP indicate a very sizeable current account deficit, but it is the lowest current account deficit since the September quarter of 2002. Encouragingly, our external accounts are starting to move in the right direction. This is also the first quarterly trade surplus since the March quarter of 2002.

Whilst these signs are encouraging, we still have a long way to go; but I am confident that we are going in the right direction. The Treasurer and the Prime Minister have reminded the House that this is a government that inherited very high inflation. We also inherited an appalling trade performance from the previous government. This was a government that squandered the opportunity to sustain our export performance into the future. It was content to simply ride on the back of the resources boom. It was a government that recorded 72 consecutive monthly trade deficits. No previous government in Australia’s history presided over such a woeful trade performance. This had the cumulative effect of contributing to a record current account deficit of almost $67 billion for 2007, along with record foreign debt of close to $600 billion.

This is the legacy that we inherited and that we are seeking to turn around. We started that task in the May budget with the commitments, which have been referred to constantly since then, to investment in Infrastructure Australia and investment in skills formation in this country. We also saw that budget increase the commitment to the Export Market Development Grants Scheme. This week I will be receiving the Mortimer review, which will advise us on ensuring that our trade policy into the future becomes much more integrated as part of the broader economic policy. We have already commenced our commitment to the twin pillars approach of trade policy—trade liberalisation at the border and market reforms behind the border.

I said last week in this House that I remain confident of the breakthrough in the Doha Round. Last week Australia negotiated and concluded with New Zealand the most comprehensive free trade agreement ever entered into by the ASEAN countries. This is Australia’s largest free trade agreement ever negotiated and, given the collective contribution of the ASEAN economies, they are Australia’s largest trading partner. This is good news. It is good news for underpinning these figures that point us in the right direction. We will leave no stone unturned in turning around the woeful trade performance of the previous government.

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