Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Trade. Can the minister inform the House of Australia’s recent trade performance and the results of today’s release of the balance of payments for the March quarter?

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

I thank the member for Hindmarsh for his question. I know full well the great interest he takes in the export industries. In fact, we were meeting on Friday in Adelaide with successful recipients of the Export Market Development Grants Scheme—a scheme which those on that side of the House promised to make easier and then failed to fund and which we, in the last budget, ensured would enable the full payment under the EMDG from the sclerotic mess that those opposite left this scheme in.

I can, and am very pleased to, talk about the success of Australia’s recent trade performance because it has been one of the very effective cushions enabling Australia to weather the global financial crisis far better than others. World trade has not been a cause of the global financial crisis but it certainly has been impacted by it. There have been all sorts of projections—most recently, that this year will see a drop in trade of 11 per cent.

Australia, on the other hand, has continued to put in an important and strong trade performance. We have posted eight consecutive monthly trade surpluses. The balance of payments figures that were published today for the March quarter show that the current account deficit fell by $1.7 billion to $4.6 billion in the March quarter—the lowest quarterly current account deficit since December of 2001. This represents the equivalent of 1½ per cent of the December quarter GDP compared to 2.1 per cent previously. Goods and services export volumes increased by 2.7 per cent and net exports are expected to have contributed 2.2 percentage points to GDP growth in the March quarter of 2009.

Net foreign debt—something we never heard the other side talk about—fell by three per cent to $674 billion. We hear the other side of the House talk about debt. They were the ones that had the debt truck before the change of government in 1996. Do you remember the debt truck that was parked outside the front of Parliament House? And this was a government that promised to reduce the foreign debt. The point is: they doubled it. They turned that debt truck into a B-double and parked it in the driveway of every Australian household in this country. It took a Labor government, on coming to office, to understand the importance of net exports to our GDP and to make constructive efforts to advance it.

These are significant figures. Another important thing to understand in these balance of payments figures is that the balance on trade in services turned around from a deficit of $191 million to a surplus of $448 million. Goods and services export volumes rose by 2.7 per cent—a very strong performance given the global environment.

It was not until we came to office that we really highlighted the importance of focusing on services exports. The problem in this parliament is that, while ever trade defaults to the National Party under a coalition government, the focus of trade will always only be on agriculture—and essentially broadacre agriculture at that.

The fact is: we need a diversified approach to trade. Of course we have to improve market access for our agriculture but we have to concentrate as well on elaborately transformed manufactures, on services and on investment. It was not until this government came to power that we have built that comprehensiveness into the approach to trade policy and it is beginning to show important dividends. It is important that we keep the task up.