Doorstop Interview, Narangba Valley State High School, Qld: Balance of Payments, Internet, Economy, Fuel excise

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Doorstop Interview, Narangba Valley State High School, Qld: Balance of Payments, Internet, Economy, Fuel excise


Transcript No. 2000/23


The Hon Peter Costello MP



Narangba Valley State High School, Qld

Friday, 3 March 2000

10.45 am (Qld time)


SUBJECTS: Balance of Payments, Internet, Economy, Fuel excise


Well, today’s Balance of Payments show an improvement in Australia’s

position. What they indicate is that there’s been strong growth in exports, which for

the December quarter are up 4.8 per cent, increasing and outstripping the growth in

imports of 2.6 per cent. The December quarter Balance of Payments figures, which are an

improvement, are in line with the Government’s forecasts. We would expect, as the

world picks up and as our prices pick up, that Australia’s Current Account Deficit

will decline as a proportion of Gross Domestic Product. But the news today on the December

Balance of Payments is good, an improvement in our trading position, as the world picks up

Australia’s export position will become stronger.



Treasurer, this morning Prime Minister Howard has said he’s puzzled by the

Internet boom. Does it puzzle you?



Well, obviously it’s a major economic development, global development, the

Internet boom, and obviously this is going to be enormous commercial opportunities for

people in the future. Now we’ve got to make sure that Australia gets it share of the

boom in electronic commerce, and gets its share of high technology start-ups. And we are a

skilled sophisticated nation, we have people who have real skills in this area, we ought

to encourage them to be part of it.



Do you think Australia is still seen as an old economy though?



There’s a lot of discussion in international circles about whether Australia is an

old or a new economy. I think we’re a new economy in the sense that we have

sophisticated skills, we have a good service base. It’s true we also have a strong

resources sector, but people shouldn’t call that an old economy, people should

recognise that as a strength of the Australian economy – strong markets supplying,

particularly, for manufacturers overseas. But I think it would be a mistake if

international analysts thought that this was an old economy. This is a country which has

enormous sophistication, a penetration of personal computers, the roll out of the optic

fibre, and some of our entrepreneurs are as good, if not better, than those of the rest of

the world.



Do you think the dollar is undervalued at the moment?



I don’t comment on the level of the dollar.



Do you think it’s the perception of Australia possibly being an old economy

that’s affecting the dollar?



Look, there’s been a lot of discussion as to why people might buy or sell the

currency, at the end of the day they take their own risks, because at the end of the day

it’s fundamentals which drive an economy. What are the fundamentals in Australia?

Strong growth, low inflation, falling unemployment, and, I think, tremendous commercial

opportunities. I’d rather be a new and old economy, let’s get it both ways.

Let’s get it both on the high tech and on the old resource stocks as well, even

personal computers and technology have to have a manufacturing base to support them.



What about the growth of News Limited?



Well, it’s something that stockmarket investors are taking their own decisions on.



Just going back to the Balance of Payments, do you think it’s time for the market

to come back into more equilibrium?



These are an improvement in Australia’s Balance of Payments. That is, that the

December quarter was an improvement on previous quarters and it was better than expected.

And most importantly what it showed was Australia’s exports were up. These are good

signs. We think that the Balance of Payments should improve over the course of the next

year or two as the world comes back. We’ve been trading in Australia through the

biggest financial crisis of our times – the Asian financial crisis. Our prices were down,

our domestic economy was strong. Our domestic economy is still strong but as the world

picks up and our prices pick up, that will improve our Balance of Payments. And

you’ve seen a bit of an improvement in this quarter, and we would expect over the

next year or two a continuing improvement in the position which is good for Australia.



Treasurer, do you think the current system of excise on fuel is encouraging operators

to dilute fuel?



There’s no excuse for anybody to dilute fuel. When a motorist rolls up at a petrol

bowser, they roll up to buy petrol, and anybody who is diluting that is engaging in

deceptive conduct and cheating their customer. There is no excuse for it whatsoever. And I

call on those State authorities that are responsible for fair trading to prosecute to the

hilt anybody who is cheating their customers in that way. Thanks.