our exporting and importcompeting industries super - competitive, and hence it is exerting an expansionary influence on the economy. on fiscal policy, the need to more than compensate consumers for the imposition of the gst ensured that it moved in an expansionary direction between last financial year and the present one. again, i think we can all agree that, even though the budgetary position will remain in surplus for mediumterm purposes, the current stance of fiscal policy is not imposing a contractionary influence on the economy. overall, therefore, i conclude that because the economy has not developed the imbalances of the past, it has not been necessary to attempt to remedy them with the sort of counter measures in the fiscal and monetary areas that were often needed in the past. this is another way of saying that we have, in my opinion, avoided the boom - bust cycle in economic policy, and hence have an excellent outlook for the coming year. i have no further comments to make on the economy at this stage, but will be happy to answer your questions. the only other point i would like to make concerns the economics of banking. in the past, we have often provided to the committee a paper on some banking subject, such as bank margins or bank fees and charges. on this occasion, there is no special paper, but we have recently finished a major study, in conjunction with the accc, on interchange fees in credit and debit card schemes. we will be happy to answer any questions on that study. “ recent influences on the exchange rate ”, address to ceda annual general meeting dinner, melbourne, 9 november 2000.

is positive for australia as asian countries are our major trading partners. while the world economy as a whole is forecast to remain relatively sluggish next year, economic growth for the group of countries that comprise our major trading partners is expected to recover to a relatively normal pace. some commentators question the capacity of asia to continue to grow if the developed economies of the north atlantic remain weak. while there is no doubt that weakness in the developed economies would have an adverse effect on asia ’ s growth prospects, we should not lose sight of the fact that most of the growth in the larger asian economies comes from their own domestic demand. in the case of china, for example, domestic demand contributed on average close to 9 percentage points per annum to growth over the past decade, while net exports contributed about 1 percentage point ( see table 1 ). importantly, the authorities in most of these countries have plenty of scope to pursue policies that sustain domestic demand. table 1 : average economic growth * annual average growth 1999 – 2008 ( % ) japan china india korea indonesia taiwan singapore 1. 3 9. 7 7. 1 5. 2 4. 7 3. 8 5. 6 contribution from : domestic demand ( % points ) net exports ( % points ) 0. 9 8. 7 7. 5 4. 5 4. 1 1. 6 4. 6 0. 4 1. 1 – 0. 4 0. 7 0. 6 2. 3 1. 4 * this calculation abstracts from the fact that some of the growth of domestic demand has come from increased export income. sources : ceic ; thomson reuters ; rba. the australian economy in 2009 has held up much better than had been expected earlier in the year. australia is the only developed economy where year - ended growth in gdp has remained positive during the past year. it is now 18 years since australia has experienced a negative in year - ended gdp growth, a very prolonged economic expansion ( graph 2 ). with the economy having only recently entered a new upswing, it is reasonable to assume that we will see this growth extended for a few more years yet. graph 2 over the next few years, australia is also expected to see a further expansion of the resources sector, including the development of some very large gas projects. mining investment, which is already at record levels as a share of gdp, could rise substantially further in the next five years or so ( graph 3 ). graph 3 if this scenario eventuates, it will have powerful and broad -