Chris Hayes (Werriwa, Australian Labor Party) Share this | Hansard source

This is a timely motion to come before the House, as it is about time that we made some attempt to, quite frankly, blow apart this notion that the government is trying to put around about housing prices and their connection to land releases. The notion that state and local governments are the cause of the housing affordability problem is nothing but a pathetic attempt by the Howard government to run away from the interest rate promise that it made at the last election. It is trying to prop up its failing state Liberal Party mates.

Housing affordability and its impact on realising the great Australian dream of owning your own house are not issues that should be trivialised by members opposite with the pathetic partisan politics that are being played out here. It is not an issue that should be dismissed as being the fault of another level of government. The aspirations of hardworking Australians in electorates like mine to homeownership should not be—in a bid to run away from the interest rate promises made at the last election—dismissed by the member for Mitchell, the Prime Minister, the member for Canning and others opposite as being the problem of state or local governments.

The Prime Minister’s claims that he did not promise low interest rates at the last election are only being made in the hope that people will not think that this is another broken promise. That is wishful thinking. The Prime Minister knows that those who went to the ballot box and voted for him did so in the belief that they were voting for low interest rates. Even the Reserve Bank governor knows that the government deliberately misled people about interest rates at the last election. Now, in a desperate bid to distance himself from the promise, the Prime Minister starts saying that housing affordability is a product of supply and demand and that more land should be released. With respect, the Prime Minister’s plan for improving housing affordability will lower housing prices by slashing the value of everybody else’s property. What is worse, outer metropolitan areas that already face declining values will carry a disproportionate burden.

The reason house prices have fallen is rising interest rates. The reason 2,189 repossessions have occurred in New South Wales since 2002 is rising interest rates. The reason why property prices in my electorate of Werriwa have fallen—according to the Sydney Morning Heraldby between one per cent and 18 per cent over the last 12 months is rising interest rates. The member for Mitchell would have done well to speak to the member for Macarthur, Pat Farmer, about the impact of rising interest rates. Pat Farmer has had some personal experience in this regard. He had plenty to say last week before he was ejected from the chamber on that very point but is silent today. Housing prices have fallen because of rising interest rates and interest rates have risen because of the policies of this government.

The government trots out the comparison of current interest rate levels with those of the Keating government. We all know that the headline mortgage rate is not the issue. Sure, the number might have been higher back in the Keating days, but an honest examination must also take into account the impact of mortgage repayments on the family budget—that is the bottom line. The real issue is how much of your take-home pay is needed to service your mortgage, and under this government that has hit record highs. Under this government, 9.1 per cent of the take-home pay of Australian households is required to service the mortgage. At the peak of interest rates under the Keating government, household commitment to servicing mortgages was 6.1 per cent of their income. That is the real situation and the government knows it and cannot avoid it.

Everyone knows that we are experiencing problems with housing affordability because of the incremental impact of interest rate rises overseen by this government. The front page of yesterday’s Sun Herald said, ‘Homes lost as interest rates bite.’ Low interest rates mean nothing if you are using a record proportion of your wage to pay off the mortgage.

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