Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Trade. What do the Mortimer report and the report of the International Monetary Fund tell us about Australia’s trade performance? Is the minister aware of any recent statements in relation to Australia’s trade performance?

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

I thank the honourable member for his question and I know that the member understands the fundamental importance to his electorate and to the nation of lifting our export performance. The Mortimer report and the IMF report both have a pretty simple message: first, that trade is essential for jobs and economic growth. Both reports then go on to say that we have to lift our export performance. Mortimer says that if we do not lift our exports foreign lenders will not keep servicing our ballooning foreign debt, and the IMF report says that unless we lift our exports our current account deficit just cannot be sustained.

I am also asked what Mortimer has to say about our recent trade performance. He gives it a damning scorecard in terms of the previous government’s performance. It failed on export growth. Since 2001, the export volume growth rate has fallen to a quarter of that in the 1990s. It failed on productivity growth, achieving zero productivity growth in 2007, after productivity grew rapidly in the 1990s. And it also failed on infrastructure investment, which, according to Mortimer, substantially limited export volumes and competitiveness. That is the reason that the previous government recorded 72 consecutive months of trade deficits. No government in the history of this nation has done as poorly as that. So far as Mortimer is concerned, two-thirds of our cumulative trade deficit, $92 billion worth, was incurred in the last five years of the previous government—and it managed that performance despite the resources boom.

I am also asked if there are any recent statements on our trade performance. Well, there are. They were made the other day by the new shadow Treasurer, and she is the one in this place who wants to be judged on her economic credentials. She actually thinks the Howard government’s legacy on trade was a great one.

Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Yes!

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

That is certainly not what the records show. But on Monday—I think her first intervention since her appointment to the job—she had this to say:

The diversification of our exports has reduced the volatility of the terms of trade.

In that single sentence she is wrong on three key economic fronts. First, as Mortimer points out, the terms of trade effect is caused by strong world demand, not by the diversification of our exports. Second, we did not get a diversification of exports under your term of office in government; in fact, we narrowed our export base. The services sector rate of growth in exports fell from 8½ per cent to two per cent, and—

Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Why?

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

Because you did not have the right policy. And the manufacturing export growth went backwards. Third, as to the reduced volatility in the terms of trade she is simply wrong. There has been strong upward movement in the terms of trade over the past five years. The shadow Treasurer has been accused of plagiarism in this place. I do not make that complaint in terms of that statement because, quite frankly, no-one else would be silly enough to make the mistake of getting three economic facts so wrong in one sentence.