Kay Hull (Riverina, National Party) Share this | Hansard source

Mr Deputy Speaker, have you ever sat in a meeting, listened carefully to every word and then gone out of that meeting and heard somebody else’s account of it and wondered whether you had been in the same room? That is how I feel when listening to the allegations that have come as a result of this matter of public importance put forward by the member for Sydney. There were allegations of reducing options for employment when our unemployment rate has fallen from 8.2 per cent to 4.5 per cent, an all time 30-year low. Other allegations were that wages have been reduced. Rubbish! The truth is that real wages have increased by 20 per cent—that is a fact. It is also a fact that the Australian economy is in the longest expansion since Federation in 1901 and, as a result of this growth, over two million jobs have been created. I cannot understand some of the rhetoric or how it has been collected. An opinion piece by the member for Sydney in the Sydney Morning Herald today, which obviously gave rise to this matter of public importance, mentions the four successive interest rate rises.

Let me just say to you that a report from the Reserve Bank of Australia noted that the new mortgagee today is better off compared to when standard variable interest rates were 17 per cent in 1989 under the previous government. That is a significant factor that needs to be recognised. There is a myriad of information here that I could dispel and it is sad that we only have 10 minutes, because I could go on for hours on this issue. We also have the RBA Financial Stability Review for March 2007 that said:

Overall, the household sector remains in good financial shape, which is not surprising given the ongoing strength in the economy.

And our household finances are supported by ‘continued strong employment growth, with the unemployment rate at around 32-year lows, strong growth in household income and a substantial increase in the wealth of the household sector’.

What we have to recognise when we look at many of the comments that were made as a result of this report is that households’ financial assets have increased by substantially more than their debt. And, as a result, even though household debt has increased, the net financial position of the householder has improved noticeably—in fact, it is true that household wealth has actually doubled in the past 10 years, which again makes me feel that I must have been in a different meeting room.

Under this government, the nominal wealth of households has increased by almost 10 per cent per annum. The major factor behind the increase in the proportion of our income that has been devoted to mortgage repayment is that low interest rates and a strong domestic economy have provided home buyers with the confidence that they never had under the previous Labor government, when you had a 17 per cent household interest rate. And home buyers now have the confidence to go out and buy bigger and better houses because they can afford to service larger mortgages. And that is a choice. Nobody forces anyone to buy a bigger or better house. But the choice is there. There is now an obvious choice, and that has been available to all Australians due to the financial management of this government.

In her opinion piece in today’s Sydney Morning Herald, the member for Sydney spoke, as she did in her speech, about:

... an increasing number of homeowners defaulting on loans and losing their homes ...

But when we look again at the facts, at reality, as per the RBA’s Financial Stability Review for March 2007, it is truly stated that:

The bank home-loan arrears remain at levels well below those seen in earlier periods, indicating that the majority of mortgaged households do not appear to be experiencing difficulty in meeting their debt servicing requirements.

The RBA goes on to say that:

Overall, the ratio of non-performing loans remains lower than at any time in the 1990s and low by international standards.

We also have Moody’s Investors Service reports saying that the record low unemployment rate has ensured that, while some Australian borrowers are coming under increased pressure, the absolute level of defaults and personal bankruptcy remains low.

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