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    Trade result the worst since 1983
    February 1 2003
    By Josh Gordon
    Economics Correspondent

    Australia's upbeat businesses and consumers have combined with the crippling drought and a nervous world economy to produce the worst monthly trade result since records began 20 years ago.

    Exports nosedived in December, but shoppers and companies bought more imports. Part of the reason for the record high was the purchase by Qantas of four new commercial aircraft valued at about $1.2 billion. The Bureau of Statistics said the combination of soaring imports and falling exports dragged the trade balance into the red by almost $3 billion in December. It was the 13th deficit in a row, and the biggest since January, 1983, when the bureau first started tracking the figures monthly.

    The Federal Government said the trade blow-out, which represents a big net outflow of Australian cash, highlighted the strength of the economy relative to the rest of the world.

    Trade Minister Mark Vaile said it was also the result of the purchase by Qantas of two Boeing 747s and two Airbus A-330s.

    Mr Vaile said the purchase reflected the success and stability of the Australian airline industry during a challenging time for global aviation.



    "While this is the largest deficit on record, the majority of the increase reflects the impact of aircraft imports and the effect of the drought on rural exports," he said.

    Qantas plans to add 13 of the Airbuses to its fleet over the next three years, spending about $2.5 billion a year until 2005. Labor said the deficit was an "appalling" result, which had occurred because Treasurer Peter Costello was complacent about industry policy.

    Shadow treasurer Bob McMullan said: "He's so preoccupied with waiting for (Prime Minister) John Howard's job, he's dropped the ball when it comes to managing the economy."

    During the month, exports fell by 2 per cent to $12.48 billion, while imports surged by 12 per cent to $15.48 billion.

    Imports of capital goods used for business investment rose by 57 per cent to $3.80 billion. But this was a rise of 7.2 per cent to $2.59 billion when the purchase of the four aircraft are factored in. Farm exports collapsed by 10 per cent to $2.04 billion. After the figures were announced, the Australian dollar fell slightly to 58.8 US cents.

    Mr Costello said exports could be expected to remain weak for some time, partly because it would take some time to rebuild depleted rural stockpiles.

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