Ausbuy

Media Release - Financial Review 12/12/07 - Record Current Account Deficit Forces Ausbuy to Act

December 11th, 2007

Ausbuy has recently examined the Australian Bureau of Statistics’ Balance of Payments and International Investment Position for the September 2007 quarter. We thought with a change of government it was important to do a thorough analysis of Australia’s position upon handover and this analysis leaves us concerned in the extreme. Ausbuy has been forced to take out advertising in today’s Australian Financial Review in order to bring light to this most serious state of affairs. The Australian public have a right to know the dire financial straits our country is now in.

Ausbuy is concerned at our deteriorating net foreign debt and the steady increase in the value of the Australian dollar which is being fuelled by the highest interest rates in the developed economies. This has resulted in an 80% increase in the value of the A$ in US$ terms over the last 5 years. Manufacturers are finding it almost impossible to compete with countries that have lower interest rates, lower taxes and a lower currency. We agree with fighting inflation, but the destruction of our manufacturing industry is a high price to pay. This is a problem to be faced by our elected leaders – not an unelected Reserve Bank.

Australia has just posted the largest monthly current account deficit in our history ($2.98 billion) in the middle of the biggest mining boom we have ever known. These deficits have to be financed and our net foreign debt goes up. It doesn’t matter whether it is private debt, debt by financial institutions or federal debt – it is still Australian debt. Australians are running up debts to buy imported products the country can’t afford. In the September quarter we bought $1.75 billion of imported food and drink, while our member’s battle for shelf space against cheap imports.

At the same time we are going further into debt to buy imported consumer goods, we watch the steady decline of our infrastructures and public services. We talk about private public partnerships, yet are not issuing public bonds to finance necessary work.

What will happen when the mining boom comes to an end and we have no manufacturing industry to make up the slack?

Unless something is done our descendants will judge us harshly as the generation that presided over the decline of Australia.

We must support Australian companies who will employ Australian labour, train Australian staff, pay Australian taxes and reinvest their profits in Australia.

Ausbuy is a not-for-profit company committed to promoting and supporting Australian owned companies. Our website is www.ausbuy.com.au

Ausbuy is available for further information or to conduct interviews. Please contact Lorissa Barrett, Communications Officer on 0409 028 153 or the Ausbuy Office on (02) 9954-6144

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2 Comments »

1. Can you tell us how much of our interest payments are heading overseas? With the ludicrous amount of money wasted over Christmas (much of which is spent on imported goods) I imagine a sizable chunk of our interest repayments are also going overseas. People should think of the repercussions before they spend money on (often unwanted) gifts for people, many of whom they couldn’t care less about for the rest of the year.

   Comment by Craig — December 15, 2007 @ 3:09 pm

2. Aussie farming is dead as farmers can no longer survive with huge debts and low incomes.Great Aussie icons owned by farmers are threats for foreign takeovers.Once the farmer falls for the sale trap the foreign owner will try and import the products leaving farmers with no company to sell their goods.

   Farmers must support eachothers co-operatives and buy from eachother.Farmer companies must stay 100% Aussie owned and if they have been sold out previously to foreign owners try and buy them back.

   Comment by eyeluvozzie — January 29, 2008 @ 8:45 pm

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