Trade deficit and Foreign Debt - 1

Have a read of "Your Say" on the smh on the day the trade figures were released.

The whole trade deficit scare campaign based on Chinese made consumer goods is plain stupid. The Chinese are helping our living standards and we are close to running a trade surplus with them. At the end of the day selling to 20 million people in Australia is like selling to 20 million people in the same per capita group in China. I guess there will be more people in that category in China then Australia.

Immediate and Capital goods imports were larger than consumer goods and even larger than combined consumer goods and services. I have attached a table which breaks the component imports into percentages.

$Millions % of Total
Consumer goods: 4260 27.06%
Capital goods 2760 17.53%
Immediate 5589 35.50%
Services 3135 19.91%
Total imports: 15744

Capital goods are things like machines and computers to make the Australian workforce more productive. Immediate goods are refined petroleum products, parts to make capital goods etc.

There has been questions about GDP growth and of course debt. However the GDP is an income/expense item and debt is a balance sheet item. Finding what the asset base of Australia is harder... so I went to the ATO website.

The ATO (Australian Taxation Office) is a mine of information. Here is the latest 2001-2002 stats.

The ATO reports that these companies assets were valued at AUS $4.1 trillion. I looked but couldn't see an kind of assets for either personal, partnerships or funds.

The ABS (Australia Bureau of Stats) reported that Aus. net foreign debt was AUS$ 400 billion.

Some perspective is required. $400 Billion is only 10% of the assets as reported to the ATO by Australian companies. So foreign debt is nothing compared to debt denominated from within Australia.

Have Fun

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