Wayne Swan (Lilley, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

It is with some regret that I propose this discussion today on the failure of the federal government’s economic policies to put maximum downward pressure on inflation and interest rates because, sadly, today we have had the fifth rate rise since this Prime Minister promised to keep them at record lows. And, of course, we have now had nine rate rises on the trot. The cost to families has been enormous. The last five rate rises, since the Prime Minister promised to keep rates at record lows, have added $250 a month to the cost for a family with a mortgage of $300,000. So today is an anxious day for Australian families and also for small businesses.

But you would not have thought that was the case if you listened to the Prime Minister and the Treasurer here today in question time or, indeed, at their press conference. They have absolutely no understanding of the new interest rate reality in this country, no understanding that families are paying the highest percentage of their disposable income in mortgage interest repayments in our history—higher now under Mr Howard than under Mr Keating. We asked Mr Howard about this today and he gave his pat answer, proving he just does not get the new interest rate reality. He does not get the fact that it is harder and harder for somebody to buy a home. He does not get the fact that one in four households with a mortgage are suffering mortgage stress, or that one in three households that rent are paying more than 30 per cent of their income in rental repayments. So there is an enormous amount of stress out there which comes directly from the new interest rate reality—the modern interest rate reality.

The Prime Minister and the Treasurer do not understand that people these days have to borrow a lot more to buy a house. There is no such thing as a cheap home loan anymore. There is no such thing as a cheap house. People have to borrow a lot more than they had to in 1989. So when an interest rate rise comes along it has something like three times the punch because people have had to borrow three times as much as the amount that was needed in 1989. But the Prime Minister and the Treasurer are so far out of touch they do not appreciate the modern interest rate reality and so we got no acknowledgement of that from them today, either in the House or at their press conference this morning. In fact, what we got was an enormous amount of bragging about their record. Not a word was said about their long-term plan to fight inflation and lift productivity—that is, to put downward pressure on inflation and downward pressure on interest rates.

Australian working families will be sitting around their lounge rooms tonight looking at the news and figuring out how they are going to cope with this fifth interest rate rise in a row—the fifth since John Howard promised to keep them at record lows—

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