JPRS-SEA-86-126 28 JULY 1986

Southeast Asia Report

[FBIS] FOREIGN BROADCAST INFORMATION SERVICE

NOTE

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JPRS-SEA-86-126 28 JULY 1986

SOUTHEAST ASIA REPORT

CONTENTS

AUSTRALIA

Expanding USSR Fishing Agreements in Pacific Prompt Concern (Editorial; THE AUSTRALIAN, 21-22 Jun 86) .........eeeeees

Former RAN Officer on Risks of U.S. Ship Visits (Edmund Doogue; THE AGE, 26 Jun 86) .... ........... secccee

Ambassador Urges U.S. To Respect Canberra's Interests (Samuel Washington; THE AUSTRALIAN, 30 Jun 86) ........+...

Hayden Calls for Tribunal To Judge Pol Pot (Cameron Forbes; THE AUSTRALIAN, 27 Jun 86) .......eeeee0s

Party Factionalism, Unions Threaten PM's Economic Strategy (Paul Austin; THE AUSTRALIAN, 23 Jun 86) e*eneneeneeneeneneeneeneee

Hawke Adviser Interviewed on ALP Factionalism (Graham Richardson Interview; THE WEEKEND AUSTRALIAN, 28-29 Jun 86) eeeeseveeeeeeceeee eee eee eeee eee e eee eee eee eee eee

Role, Impact of Socialist Forum Analyzed (Paul Austin; THE AUSTRALIAN, 23 Jun 86) ....seeeeeeeeeees

Educator Hits ‘New Right’ Threat Against Unions (Alex Carey; THE AUSTRALIAN, 27 Jun 86) ...ceeeeeesesecees

Military Objections to OTH Radar Reported (Peter Young; THE AUSTRALIAN, 23 Jum 86) .....seeeseeeeees

Defense Establishment Criticizes Dibb Report (Peter Young; THE AUSTRALIAN, 25 Jun 86) ....eeeeeeeseeees

Yinance Department Figures Show $800 Million Deficit Growth (Robert Garran; THE AGE, 21 Jun 86) .....eeeeeeees oeeccese

13

16

18

20

22

Federal Treasurer Outlines Long-Term Economic Strategy (Paul Keating; THE AUSTRALIAN, 21-22 Jun 86) .....c.ceeeees

Editorial Urges Industry To Resist Protectionism (THE AGE, 20 Jun 86) eeeseeeeeceeeeeeeeeeeeeeeeeeeeenes eee ea

WA Premier's Economic Measures Analyzed, Lauded (Editorial; THE AUSTRALIAN, 25 Jun 86) eeeeoeeeeeeeseeeeeeeee

Coal Cancellation Cuts Exports to Israel by 66 Percent (Douglas Davis; THE AUSTRALIAN, 25 Jun 86) ......cceeeeees

PHILIPPINES

Ople Writes About Good Government Commission (Blas F. Ople; THE MANILA EVENING POST, 1 Jul 86) ........

Columnist on Critical Period for Aquino Government (Amando Doronila; THE MANILA CHRONICLE, 1 Jul 86) ........

Solicitor General Produces Evidence of Marcos Graft (Gerry N. Zaragoza; BUSINESS DAY, 2 Jul 86) ..............

Commission Denies Request on Marcos Return (Gerry N. Zaragoza; BUSINESS DAY, 4 Jul 86) eeeeeeeeeeeeee

Local Government Officials’ Terms Expire (Rey G. Panaligan; MANILA BULLETIN, 1 Jul 86) ............

Columnist on Military's Power Over Civilians (Amando Doronila; THE MANILA CHRONICLE, 2 Jul 86) ........

Graft, Smuggling Reported in Customs Bureau (BUSINESS DAY, 2 Jul 86) eeeneeeeneeeeeeeeeeeeeeeeeeeeeeeeee

Government Agrees To Lift All Import Restrictions (Daniel Cc. Yu; BUSINESS DAY, 27 Jun 86) eeeeeeaeeeeeeeeeeee

Government To Retaliate Against Import Controls (THE MANILA TIMES, 27 Jun 86) e*eeeoeve,eeoeeeeeeeeeeeeeeeeenneenee

Business Sees No Change in Economic Policy (Daniel Ce Yu; BUSINESS DAY, 1 Jul 86) eeeneeeeeeeeeeeeneenee

Coconut Planters Bank Elects New Board (Ramon R. Isberto; BUSINESS DAY, 1 Jul 86) .....eeeeseeees

Lack of Coconut Export Taxes Could Reduce Revenue (Carol E. Espiritu; BUSINESS DAY, 2 Jul 86) eeeneeeeeeeeneeee

Coconut Authority Seeks Cocofed Sequestration (BUSINESS DAY, 2 Jul 86) e*eeneeeeeeeeeeeeeeeeeeeeeeeeeeeeee

TE

24

28

29

31

32

35

37

39

41

44

46

51

53

57

59

61

Article Reviews Dispute Over Coconut Bank (Ramon R. Isberto; BUSINESS DAY, 2 Jul 86) ......cececceees

24 Corporations Petition Supreme Court Over Sequestration (R. Panaligan; MANILA BULLETIN, 2 Jul 86) ......cccceccccees

"Economic Indicator’ Column on Central Bank Loans (BUSINESS DAY, 2 Jul 86) eeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeweesee

Drop in Peso to Dollar Rate, Averages Reported (BUSINESS DAY, 3 Jul 86) eeeseeeeeeeeeeeeeeeeeeeeeeeeeeeen ee @

COALITION GOVERNMENT OF DEMOCRATIC KAMPUCHEA

VODK Commentary Hails Control of Angkor Wat Area (Voice of Democratic Kampuchea, 19 Jun 86) ..... ...........

Sihanouk Army Official Discusses Resistance (Jacques Bakaert; BANGKOK POST, 27 Jun 86) ................

VODK Applauds ICK Ad Hoc Committee Statement (Voice of Democratic Kampuchea, 29 Jun 86) ................

VODK: 300 SRV Troops Desert From Sisophon Battlefield (Voice of Democratic Kampuchea, 29 Jun 86) eeeeeeeeeeeeeenee

VODK Condemns SRV Rejection of ASEAN's Call

(Voice of Democratic Kampuchea, 1 Jul 86) ................. VONADK Rounds Up SRV Casualties for June

(Voice of the National Army of. Democratic Kampuchea,

1 Jul 86) eeeeoeeveeveeoeeeeeee ee eee eeeeeeeeeeeeeeeereeeeeeeeeee

Roundup of VONADK Battle Reports 26 Jun-3 Jul (Voice of the National Army of Democratic Kampuchea, 27 Jun-3 Jul 86) eeeeoeeoeaveeeeeeeeeeeeeeeeeeeeeeeeeeneeeeenee

VODK Reviews DK Forces' Activities in Kompong Thom (Voice of Democratic Kampuchea, 5 Jul 86) ....cceceeeeceees

VODK Cites UN Official Blaming SRV Stubbornness (Voice of Democratic Kampuchea, 6 Jul 86) .......... ···....

VODK Reviews DK Forces’ Rainy Season Activities (Voice of Democratic Kampuchea, 7 Jul 86) ..........··.....

VODK Commentary on Coming Nonaligned Summit (Voice of Democratic Kampuchea, 8 Jul 86) .................

SFRY's Mojsov Sends Message of Thanks to Khieu Samphan (Voice of the National Army of Democratic Kampuchea,

8 Jul 86) eeeeveeeeeo eevee eee eee ee eeeeeeeeeeeeeeeeeeevueeneeeeeee

63

66

68

70

73

75

78

80

81

83

85

87

89

91

93

95

Briefs

VONADK: Soldiers Mutiny VONADK: SRV Convoy Ambushed VONADK: Sandan District Capital Hit

VIETNAM

INTERNATIONAL RELATIONS, TRADE, AND AID

USSR Journal Interviews Nguyen Co Thach

/7310

(PROBLEMY MIRA I SOTSIALIZMA, No 5, May 86) ...............

96 96 96

97

AUSTRALIA

EXPANDING USSR FISHING AGREEMENTS IN PACIFIC PROMPT CONCERN Sydney THE AUSTRALIAN in English 21-22 Jun 86 p 20

{Editorial: "Pacific Dangers"]

[Text]

Vanuatu, for example, has THE move by the Soviet Union to

negotiate a fishing agreement with Ht mae pi ps a with

Fiji is a disturbing sign of the Soviets’ Lee during ts *

ae 2 Ge confrontation with America. It is The Soviets’ first breakthrough in formally a member of the Non-Aligned

the South Pacific came when it cap Gan oa Gadieue tam oak

a fishing agreement with the island Vietnam.

nation of Kiribatl Recent reports In the Pacifie region it is itkely that

indicate that the Kiribati Government

agreement is working out, and is surrogates. It is also likely that by

considering extending port facilities to exploiting Third World and anti-

1J AD

ae oo a eee He the first stage of themselves are no cause for great growing presence. alarm. However, when viewed in the ;; The increasing entanglement of context of other regional anti-democratic regimes around the developments they form part of a world with the fate of the Pacific is general trend in which Western also demonstrated dy the factions of influence and values are under the Kanak independence movement in in the Pacific, New Caledonia, which are strongly while the Soviet Union and its friends supported by Vanuatu, and which have are laying the foundations of strong also looked to Libya for financial and

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development in such a way that the Soviet alternative is seen to be. unattractive. We should not merely sit by and let the situationdrift[|

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JPRS*SEA+86+126 28 July 1986 AUSTRALIA

AMBASSADOR URGES U.S. TO RESPECT CANBERRA'S INTERESTS

Sydney THE AUSTRALIAN in English 30 Jun 86 p 8

[Article by Samuel Washington]

[Text]

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JPRS*SEA*86°126 28 July 1986

AUSTRALIA

HAYDEN CALLS FOR TRIBUNAL TO JUDGE POL POT Sydney THE AUSTRALIAN in English 27 Jun 86 p 6 [Article by Cameron Forbes]

[Text]

MANILA, 26 June. Australian The US Secretary of State, Mr Perctgn Master ean Shultz, joined Mr Hayden in ruling out called forthe seiting up of tribunal Support for any, Caihbndid ot ot aimed at removing, as an obstacie to —— thats coment in Cambodia, the Pol Pot ened strongly urged the interna- of the Khmer Rouge. eet vommunity to support an eight- Mr Hayden wants the culpability of Poh tty the Pot Pot leadership established anti-Vietnamese coriition which ts once and for all and the credentials of beaded by Prince Sihanouk. other members of the Khmer Rouge A major element in the eight-point tested proposal which has already been Se ee ar Se Se cae rejected by Vietnam is quadripar- and “tle of the Rouge to tite government inci the Khmer pate in Khmer national Rouge. The Khmer Rouge, a member of the Mr Hayden said that the presence of ts it, Cambodia, is nominally Pol Pot and ne phy war bie impediment for a num- headed by Khieu Samphan. od countries, Australia, Bui Pol Pct, who was ultimately re- in considering a range of otherwise wisely regarded as ail being ibe * the tribunal major force in the movement. na nen teateemnes” eal tel te te Mr Hayden was speaking at a con- moval of the Pol Pot presence would ference of Asean, western and Japa- eliminate owe of the most serious im- nese f ministers held at the pediments to progress. conclusion of the anaua!l Asean Mr Hayden said he had made the N be tpt nt hay patted namese representati soone arcs rg later a system would have to be devel- At a later brie be declined to oped for dialogue with genuine repre- ae aan Ook ie cee sentatives of the Khmer people, ca ne “excluding people —— wwe * proposal was tee Malerion en- Mr Hayden cautioned against being 7 Loe too optimistic about any major change Forel i AA. Abmad in Vietnamese towards Cambo- Ithauddeen, who said be hoped dia, even after the Vietnamese Com- munist Party's Sixth Congress which

the maiter further. will be held later this year.

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/9317

JPRS*SEA=86«1 26 28 July 1986 AUSTRALIA

PARTY FACTIONALISM, UNIONS THRFATEN PM'S ECONOMIC STRATEGY Sydney THE AUSTRALIAN in English 23 Jun 86 pp 1, 2

{Article by Paul Austin]

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The plans were not accepta- in the coffin of the accord”. mentsi” to the maintenance ah hy Shy Mr Tanner said Mr Hawke of the accord. the accord an tnstrument for was proposing to introduce “If we contrac suppressing real wages. Liberal policies, which would policies, then the deficit will Workers had already accep- lay the groundwork for the get completely out of hand,” eb aS peremn cee = Se Coalition to coturn to govern last national wage case. It was ment “after we've done - unacceptable for Mr Hawke to dirty work for them” 5. o,. “intolerable” for a demand that they accept fur- He said supporters of Mr ~_— y+ ther discounting, Hawke in the Labor move- am A Ay un- because had nothing to ment had accepted unpopular do with the balance of pay- decisions on uranium mining, Bas Hipwe aatd Ghe sich of Sie ments crisis. Aboriginal land rights end fi- Hawke's plans was that “all Mr Half said the reso- nancial deregulation because that has been achieved in the lution ou a more viable the Government had been de- last three or four will be plan for tackling the crisis, in- livering on jobs and economic squandered Govern- cluding proposals for a more growth. ment by pursuing policies interventionist Mr Hawke's plan put this at which are not in line with the policy. | risk. accord and not in line with “If the resolution's proposals “Are you going to cop wage the fundamentals of eco- were adopted by the Govern- cuts, higher unemployment nomic policy”. ment then Joan Sutherland and cuts, or a The federal secretary of the would sing louder, Deck would point blind devotion SPU, Mr Greg Swerd, said the run faster and it would help ceases and you say enough is most important task for the Ben Lexcen get the Australian ? If you'll accept this, ALP and the union movement dollar floating again,” he con- anything,” Mr was to convince the Govern- cluded. Sa ment that the strategy of the resolution was seconded Mr Howe told the confer- accord remained correct. » ng A ence Gat eapeeeny F staffer, : funda- or wage-earners who described Mr Hawke's ad- oe turther discounting.

dress as “the first major nail

/9317 cso: 4200/1221

JPRS*SEA+86-126 28 July 1986

AUSTRALIA

HAWKE ADVISER INTERVIEWED ON ALP FACTIONALISM

Sydney THE WEEKEND AUSTRALIAN (Weekend Supplement) in English 28-29 Jun 46

pp 1, 17

[Interview by David O'Reilly with Senator Graham Richardson, ALP Right Ally of Prime Minister Robert Hawke: "Hawke's Number Cruncher"; passages in slantlines published in italics; first paragraph is AUSTRALIAN's introduc-

tion]

[Text]

~

RECENTLY Graham Richardson, to use his own parlance, had a big win. He didn't crush the Left in a fac- tional coup or swing the Prime Minister, Mr Hawke, aivund to his own eye-to-the- vote view on some policy decision.

He simply got given a bigger office. Twenty-five centi metres bigger. to be precise.

Following recent changes to the already cramped office ar- rangements in Canberra's

Is the granite facade of the Harrke Gevernment and the Australian Leber Party's Right Wing machine starting te crack? Although the Right showed thelr power in NSW recently when Barrie Unsworth was swopt into the position of Premier designate, the resignation this week. of Peter Barren, a senior member of Mr Hawke's Manchu Court, has indicated that the ferthooming ALP Federal Conference in Hebert may net be all smooth sailing for the Right. In Canberra this week DAVID O'REILLY spoke to the Prime Minister's chief ‘number cruncher’, Senater Graham Richardsen, about the power plays that ge on behind Canberra's clesed deers.

Parliamer ouse. Senator Any special privileges would Richardson oa his staff of have opened himself and Mr two were shifted just up and co oe Ee ae N tables Despite the telephone-booth 4 and shortcomings, metre for into a space ae itso oo just three and a half by would ny ormer ree years than probably sik sion and cam tev most other offices in adviser to the Prime Minister Australia. knew when he moved into the In room M168 recently Sena- building three years ago as a tor Richardson talked frankly new senator he had to * to The Weekend Australian the about the business conducted Mn P. there his own role in the

Government, the “mythology”

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“It's the largest group in Caucus by quite some distance

“The truth is. however. that

will continue. The faction doesn't expect to win every- thing. It never has.”

years as principle adviser. Despite the conventional

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important to him. He sees a lot of K so that’s impor- tant. Now, having said all that Peter (Barron) saw Hawkey more than anyone. More than anyone in the country. More

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influence is that we (the Right) were the ones that were

on the tram at the start, right? Rag! been there all the

have when they sit around the table.

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hard to look back on our three

years and say we haven't done much.

properly and well and create enough wealth for

to enjoy themselves and im- prove their standard of living over time.

“That's what we set out to do and in the end I've always be- lieved the (Labor) movement, like the people, judge you on results.

“If you deliver the then they will thank you for it. If you don't they will kick you.

“Now, we've had three years of delivering the goods and. by all objective evidence avatia- bie, the percentage in the polls of Hawke is enor- mous. It’s enormous. So I just

don't believe the propaganda that the labour movement has |

decided we are not a true Labor government.

“There is no objective evi- dence for that.

“It may well be that some people in the party don't like it. It certainly is that case that some people in the party dort like it.

“And it's probably che case that all the people in the party worry about some aspects of it.

“But. overall, you would have to say we've done all right and the reforms we've brought in were appropriate ... we led on tax reform we were all out there leading.

“Look, on what are we sup-

posed to lead? All I can say to these pecpic is what are the is · sues that people are crying out for leadership on?

“The only thing you ever hear talked about is uranium and people just aren't crying out out there for us to lead on uranium.”

/But isn't it extra- ordinary for you and Mr Keating to stand at opposite ends of that ship for six months? /

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/But you can see what I'm getting at? Does

Mr Keating lose people he could otherwise ke’ on-side because his

handling of them is abrasive? /

eating and Hawke could do with

point that filling his role as factional boss. numbers man and tactical “sweeper” for Mr Hawke could be a problem. “You make a decision on

“I have never taken the chairmanship of Caucus mittees or any of that sort of. stuff. . . I've sat in rooms and

taken one for myself.

“I won't overestimate myself. Obviously there would be some who would like to think I'd stay in this job forever...

| some because they think I doa job and others who are rivals for a ministerial ballot.

“But I don’t worry about anything like that. It's not a’ determining factor in any. thing I do.

“I will make up my mind to run for the ministry after talk-. ing it over with my family and friends and for my own rea-

sons.

“It will have nought to do with whether or not 1 thinks I should stay ng what I'm doing or else. . . rather, just because either want to do it or I don't.”.

/9317 cso: 4200/1221

28 July 1986

AUSTRALIA

ROLE, IMPACT OF SOCIALIST FORUM ANALYZED

Sydney THE AUSTRALIAN in English 23 Jun 86 p 13

[Article by Paul Austin]

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JPRS-SEA-86-126 28 July 1986

AUSTRALIA

EDUCATOR HITS ‘NEW RIGHT’ THREAT AGAINST UNIONS

Sydney THE AUSTRALIAN in English 27 Jun 86 p 13

"The New Right Is Working Overtime Against

[Commentary by Alex Carey, honorary visiting fellow, the school of Psychology,

University of New South Wales:

Unions" ]

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286 28 July 1986 _ AUSTRALIA

MILITARY OBJECTIONS TO OTH RADAR REPORTED

Sydney THE AUSTRALIAN in English 23 Jun 86 p 2

[Article by defence editor Peter Young]

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JPRS-SEA*86°126 28 July 1986

AUSTRALIA

DEFENSE ESTABLISHMENT CRITICIZES DIBB REPORT

Sydney THE AUSTRALIAN in English 25 Jun 86 p 13

"The Pros Aren't All that Impressed"]

["Defence" column by Peter Young:

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JPRS“SEA=86-126 28 July 1986

AUSTRALIA

FINANCE DEPARTMENT FIGURES SHOW $800 MILLION DEFICIT GROWTH

Melbourne THE AGE in English 21 Jun 86 p l

[Article by Robert Garran]

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The spokesman for the Treasur- er said the blowout would put even more pressure on next year's budget. The Government already faces a severe headache in trying to keep the 1986-87 budget deficit under the $5.5 billion target set by the economic trilogy promise.

The Opposition Leader, Mr Howard, said the figures were fur-.

mammoth budget task the Go- vernment is facing,” he said. “It is another example of the Govern- ment misleading the public.” The Finance Department state- ment said spending had been higher than expected largely be- cause assumptions underlying the had not been met, parti- cuarly in the area of exchange rates, unemployment benefits and interest rates. This had added more than $600 million to spending. . The spending jump was caused

y: @ The fall in the dollar making imports by Government more expensive. @The Government having to spend more than expected on un- employment benefits. @ High interest rates forcing the Government to pay more for its borrowings. '

The statement said Govern- ment decisions chiefly the deci-

‘sions to compensate oil producers

for the financial year would come in close to the 12.6 per cent esti- mated at budget time.

This means the budget ts almost entirely due to over-runs in Government spending.

National Mutual Royal Bank, Dr John Marsden, said last night that he and most other private econo-

‘ic growth during the six months to March, it was highly unlikely eco-

/9317 CSO: 4200/1221

23

nomic. growth would pick up enough to meet Government ex- pectations of three to 3.5 per cent growth tor 1986-87.

.. He- said slower economic

have to pay out more in unem-‘ ployment benefits, adding further. pressure to the difficult budget: task the Government is facing.

The Government's ‘target for spending cuts earlier this year was $1.4 billion, but events since will have pushed this target high- | er. In his address to the nation last week the Prime Minister, Mr Hawke, said the Government had identified $1 billion in cuts, and Senator Walsh said later than $200 million. more had been found since. Cuts to the states at last Friday's Premiers’ conference have added about another $450 milfion to the cuts.

In his address to the nation Mr

the welfare sector will not bear the brunt of the cuts.

oa «] 28 July 1986 *

AUSTRALIA

FEDERAL TREASURER OUTLINES LONG-TERM ECONOMIC STRATEGY Sydney THE AUSTRALIAN in English 21-22 Jun 86 p 21 ["Exclusive" article by Paul Keating, Federal Treasurer: "Saving Australia"]

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AS the Prime Minister the ability of government to assist those in the community ° explained in his address to mest in need Laying the the nation last week, the Adjusting the ———— . most pressing economic economy to reduce its unsus- 1 tainable balance-of-payments foundations nge facing Australia deficit requires us to continue today is that forced upon us the program we have followed by international circum- in government to date of SS the come tune we have addressing the fundamental, redressed the chronic disrup- oom, issues in economic tion to the profit and wage In a nutshell, the prices we, policy shares that was a legacy of the are paid for our exports have For instance, while we have Fraser government. The profit fallen dramatically with the understood there was a share of GDP has been res- result that as a nation we are: t for some public- tored to its level of the late spending much more sbroad sector stimulus to the econ- 1970s. Agreed wage we are earning. We must omy to overcome the recession restraint has reduced real unit face up to this fact of life. We that gripped Australia when labour costs sharply. It is this have no we first came to office, we also shift in the economic funda- It will involve some tough have recognised that public- mentals that has underwrit- decisions and some difficult sector deficits in this country ten the creation of more than adjustments as we strive to were unsustainably 600,000 new jobs under the broaden and deepen our ex- In our first in Hawke Government. But the end result will be re- fiscal imbalance ~ a omnes qronts Ser granted. g. We are em tive Commonwealth deficit of » you have to upon a process which will see a around § per cent of gross think back to the period of late fundamental re-balancing of domestic product (GDP). In 1982, when unemployment had emerge with a more sophisti- sively reduced the Common- corporate profits had cated , wealth deficit to less than half smashed and bankruptcies better able to fulfil the legiti- of that figure. To were rife, to understand the mate aspirations of ordinary the A .R. that enormity of this achievement. Australians for economic achievement it is worthwhile 8 growth and jobs to understand that during the recovery has been But it is only through same period the United States’ our accord with the ACTU the foundations = deficit has remained es ee ture economic we at about 5 per cent of undamental changes. to maintain and enhance GDP. accord has succeeded in over- the living standards which coming Australia's traditional Australians Equally, chronic failure to sustain a

growth beyond which we can hope to increase > © a ome

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gainin employment. Moreover, it has contributed to a dramatic decline in the level of indus- trial disputes to a 17-year low, and a consequent benefit to.

More recently, the area ef policy

form package is to even out the playing field and allow all individuals and economic ac- tivities an equal go. It is only in this way that we can ensure that the most productive and efficient industries are nur-

ustry

to changed international cir- cumstances, it is even more essential than before that Australia's financia] resources be used in the most efficient and effective manner possible. Tax reform assists that aim.

Yet another area where the Government has sought to

the efficiency of the economic system in order to lift its po- tential for and job creation. yet again, while

it was an area dabbied in by our predecessors. vested inter- est groups had prevented the coalition from making any substantial changes.

our chief weapon in turning

Australia’s imports of con- sumption goods have fallen, imports of capital goods have risen. Such a response Is typl- cal of a country gearing up to take advantage of new market opportunities both at home and abroad generated by a currency depreciation.

Similarly, recent figures show that in volume terms (that is, ignoring price changes) there has been a 14 per cent increase in Australia's exports from the March quarter 1985 to the March quarter 1986, compared with an increase of only | per cent in the volume of imports over the same period. Again, this is firm evidence of the depreciation working to turn around the current account deficit.

ments have overshad- | owed by the collapse in inter- national commodity prices. This is a fact of life for which no one in Australia is to blame but which we can ignore only , at our peril.

This fall in export prices means that the economy has moved to a position where we are spending a good deal more abroad than we are earning. That gap our current ac- count deficit is made up by borrowing to finance current living standards. But clearly we cannot go on run- , ning a current account deficit | of $14 billion indefinitely |

munity, particularly exporters, such as our farmers and min- ers, plus other companies that ' deal in internationally traded

count deficit we will also be directly attacking one of its major symptoms: the build-up in recent years of Australia's external debt.

We recognise that while ear- lier this financial year there

therefore, assisting in cutting

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strained the States will impact more adversely on their capl- tal spending rather than their

But more to the point, it ought to be remembered that the government borrowing program given by the Com- monwealth to the States is, in fact, often used for recurrent (or consumption) purposes.

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already and reduced from the claim should be as poss-

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In g this course we have re the option of seeking to correct the balance-

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