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

Australia’s current account deficit is governed by both exports and imports. The period in which the current account was last in surplus was around 2000-01, when the Australian dollar was at 47c or 48c. One of the features of having a very high exchange rate, as we have at the moment, is that imports are much cheaper in Australian dollar terms and exports are much more expensive in Australian dollar terms. Because of the high commodity prices and the high exchange rate, the Australian economy is sucking in a lot of imports which, except in commodity areas, are affecting our exports. We expect that the rapid investment in Australia’s mining industry over recent years, where there has been something like $30 billion of investment, will boost capacity and ensure that volumes of those exports go up. As a consequence of that, exports will be stronger in the years that lie ahead.

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