Chris Bowen (Prospect, Australian Labor Party) Share this | Hansard source

What would the impact of another interest rate increase be? Again, the House does not need to take my word for it; it does not need to take our word for it. Louis Christopher of Australian Property Monitors says this of the prospect of another interest rate increase:

It very much could be the final straw for the property market. We would see an additional 10 per cent price decline in Sydney ... I hate to imagine what it would do to defaults, given they are already on the rise.

Of course another interest rate increase will put more downward pressure on house prices, not only increasing families’ monthly repayments but reducing the equity in their homes. Every economist knows that as interest rates go up housing prices go down, but the Prime Minister does not seem to care what that means for families in Western Sydney and other areas. These are families who took his word for it when he said he would keep interest rates low. Perhaps they should have listened to the Treasurer, who knows you can never take the Prime Minister’s word.

Abraham Lincoln once said that God must like common people because he created so many of us; the Prime Minister must like battlers, because he is creating thousands of them. He likes them so much that he is creating more of them through his high interest rates and high petrol prices and through his mismanagement of our economy.

He has introduced a complete furphy into this debate. The Prime Minister has introduced the land release issue. He talks about taking the pressure off new homebuyers and he ignores the pressure on people already with homes struggling to pay off their existing mortgages as the value of their homes fall and their monthly repayments rise. If he wanted to do something about new homebuyers, he could do something about construction costs. The ABS house price survey shows that construction costs alone have increased 56 per cent over the last eight years—twice the rate of inflation. Why? Because this country has a skills crisis and tradesmen are not available to build houses.

What is this government’s answer? To build a TAFE college in Africa. The Minister for Vocational and Technical Education is probably the least competent minister this government has. But that is not good enough for him—he wants to be the least competent minister in all of Africa as well. But, given his track record, building a TAFE college in Africa would not meet the high standards of public administration that those nations have come to expect.

The Prime Minister’s furphy on land release shows just how out of touch he is. He pretends no land is being released and that no land has been released in many years in Sydney. But in Sydney, for example, we have seen thousands of lots of land released in the north-west around Kellyville. Admittedly it was done by a coalition government, without any infrastructure, without a rail line or public transport, but they were released. The north-west growth sector now will contain 66,000 new homes and the south-west growth sector will contain 115,000 new homes. In Sydney right now there are 5,700 lots approved by the state government available for sale, but the interest rate increases have meant the market cannot afford them. This shows how out of touch this Prime Minister is—he does not even know what is going on in his home town.

Perhaps the Prime Minister could share with the House exactly where he thinks these land releases should be. Should they be in the Blue Mountains, in the electorate of the honourable member for Macquarie? Perhaps they should be in the farmlands of Hawkesbury, which are now in the electorate of the member for Greenway. We all know how popular land releases would be there. If the Prime Minister cares so much about land releases, why doesn’t he reinstitute the office of the minister for housing and urban development, which he abolished in 1996? If he wants to be involved in land releases, why doesn’t he get involved? Why doesn’t he get the federal government involved again in urban planning, which this government has neglected for 10 years?

It is not just mortgagees who are suffering. The repossession figures that I referred to earlier also apply to small business. Many small businesses are highly geared, they have borrowed 100 per cent of the cost of buying a small business, and they are dealing with increased prices just as much as mortgagees are. Couriers, for example, are dealing with higher petrol prices and they will also have to deal with the government’s unfair independent contractors act. But the so-called ‘friends of small business’ on the other side are presiding over increases in interest rates at times of record small business debt. They should be ashamed of themselves.

We read earlier this week that the Prime Minister told his party room that people on this side of the House, and we heard it again today, are out of touch, that they are inner-city elitists and that his party is the party which understands the people who live in what he so delicately calls McMansions. I live in one of those houses that he so delicately describes as McMansions. I represent thousands of people who have borrowed heavily to buy the house of their dreams—they have borrowed massive amounts of money and taken the Prime Minister at his word. It is the Prime Minister who is out of touch with those people. It is the Prime Minister who says, ‘Release more land.’

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