TREASURER:
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.
JOURNALIST:
Treasurer, this morning Prime Minister Howard has said he’s puzzled by the Internet boom. Does it puzzle you?
TREASURER:
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.
JOURNALIST:
Do you think Australia is still seen as an old economy though?
TREASURER:
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.
JOURNALIST:
Do you think the dollar is undervalued at the moment?
TREASURER:
I don’t comment on the level of the dollar.
JOURNALIST:
Do you think it’s the perception of Australia possibly being an old economy that’s affecting the dollar?
TREASURER:
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.
JOURNALIST:
What about the growth of News Limited?
TREASURER:
Well, it’s something that stockmarket investors are taking their own decisions on.
JOURNALIST:
Just going back to the Balance of Payments, do you think it’s time for the market to come back into more equilibrium?
TREASURER:
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.
JOURNALIST:
Treasurer, do you think the current system of excise on fuel is encouraging operators to dilute fuel?
TREASURER:
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.