Peter Dutton (Dickson, Liberal Party, Minister for Revenue and Assistant Treasurer) Share this | Hansard source

I am pleased to be able to make a contribution to this important matter of public importance debate today. I just want to make one response to the previous speaker’s contribution, and that is to say that in the upcoming election I think one of the things that will backfire on Labor is their arrogance. Their arrogant belief that they have one foot inside the Lodge, one foot on this side of the parliament, was exemplified by that contribution today by the shadow minister for finance. To say that John Howard is old not because of his age but because of his ideas just showed how shallow and personal the member’s attack was on the Prime Minister. The member, in his argument, went directly to the age of the Prime Minister. That is something that Mr Swan and the Leader of the Opposition are saying they are not interested in doing, but the previous speaker today showed the true colour of the opposition and the nature of their personal attacks. Until today the attack has just been by way of briefing journalists and by snide little remarks on the side to public audiences. Today, the true colours of the opposition were shown in the spiteful attack on the Prime Minister and on the fact that he is now in his 60s.

The Prime Minister is incredibly energetic, not just in a physical sense but in a mental sense. He provides great stability to this government. He has done that over the last 11 years; he continues to do it today. My view is that he will continue to do it into the future. No personal attack by the members opposite will muddy the waters for the Australian people. Many Australians are in their 60s and I think they would look with disgust upon the argument put by the Labor Party today. Through these thinly veiled attacks the Labor Party is clearly saying to people in their 60s that they are past it. I say to mature-age Australians: do not look at some of the comments made by Mr Rudd or Mr Swan in trying to butter-up their lines to the media, look at the contribution by the shadow minister today to see the Labor Party’s true attack on the Prime Minister.

I am pleased to be a part of this debate today because I want to take the opportunity to speak directly to younger Australians. At 36 years of age, I am someone in this parliament who is relatively young and I understand some of the angst that is out there at the moment, not just among people in my own age cohort, at the older end of Gen X, as we are called—people in their early to mid-30s, people who have mortgages, who have children, who are faced with all of the demands of modern life. I have an understanding of the stress and pressure that they are going through. I also have an understanding of the stress and pressure that people younger than me are going through at the moment—people in their late teens and early 20s who might be saving for a house and paying high rents, saving towards buying a car, setting up a small business or whatever the case might be. There are huge demands in today’s society and huge expectations on younger people and, in particular, people with young families. There are huge expectations on my generation that we live in a house that is bigger than the one our parents owned. There are huge expectations on people in their mid to late teens, their 20s and 30s. The age group between 18 and 40 face expectations that they drive a new car, have the plasma screen TV and all the trappings that go with modern life, and that has brought with it pressure on households in this country. It is not just because people have proportionally higher mortgages than people had a generation ago but because with the mortgage repayments there are also now payments for credit cards, personal debt and motor vehicle debt, and all of that aggregates to put pressure on families in today’s society.

What I can say directly to people who are experiencing difficulties in meeting their mortgage repayments at the moment is that it is a very similar circumstance, but for different reasons, to the pressure that was held against people in their late teens and early 20s in the late eighties and early nineties. The pressure at that time, when I was in my late teens and early 20s, was directed at young people because interest rates were at 17 per cent. People in small business faced overdraft rates of 20 per cent. At that time, if you were a young tradie of 21 or 22 years of age who was trying to set up your own business, it was almost impossible. It was almost impossible because the climate set up by Labor when they were last in government meant that people were paying huge interest rates. They could not cope with the stress of interest rates under Labor.

I say to people today: have an historic understanding of where interest rates have been and where they would be in my view—and many economists in this country share the same view—if Labor were to be returned. Over the last 10 years this country has not had union domination in the workplace. We have not had the poor workplace practices that operated in the early eighties. I say to young people that our country today is a very different place to what it was then. If the Labor Party is returned after this election we will go back 10 or 20 years. We will go back to a situation, in my view and in the view of many economists, where unions are back in control, where strike rates will go up and where company profits will go down, which will mean people going back on to the unemployment queues. It will mean that the millions of Australians who own shares directly or indirectly by way of dividends will see reducing returns. That will send a very poor message for the future of this country and this economy.

It is a difficult message to deliver, because people aged 18, 20, 25 or 35 do not have an historic understanding of where interest rates were in the eighties under Labor and where we have come to over the last 11 years. It is essential that we explain to people the difficulty that they would be exposed to if Labor were to be elected again. It is important to say to young people today that when Labor were last in government interest rates averaged 12¾ per cent. Under this government they have averaged around 7.24 per cent. The standard variable home loan rate has fallen from 10½ per cent in March 1996, when we were elected, to around 8.3 per cent today. I say to younger people, consider this statistic: with the interest rate reductions—from 10½ per cent, when Labor were last in government in 1996, to 8.3 per cent today—people are saving around $449 a month in interest charges on an interest only loan for an average mortgage of $245,000. Say interest rates under Labor only went to 12 per cent; say they do not peak at 17 per cent like they did when Labor was last in government: somebody on a $300,000 mortgage would need to find an extra $1,000 a month. I say to people in their 20s and 30s today—people of a similar age to me—who do have high mortgages, perhaps because as a generation we have a higher expectation than many of our parents, just consider the fact of where, if Labor got into power, you would find an extra $1,000 a month. I think a Labor government in this country would be a disaster for younger people—on many fronts, not just the economic front.

It is important as part of this debate that we talk not just about interest rates but about home loan affordability. When you look at some of the research that has been done—and I have taken an active interest in this issue over a number of months—you see that a number of factors have driven up housing prices. If you look specifically at some of the work that the independent institutes and property associations around the country have done, you see that there is a common theme to each of them: the prices that have been charged by local and state government authorities have increased quite dramatically. In some areas of the country, I am told that $150,000 of an average house price of $435,000 is made up of local and state government charges. Those figures are quite alarming. That is the most significant part of the house price increase and the reason we have difficulty with affordability in the current market.

We know that the expectation of people who are buying these houses has increased. In 1984 the average floor area of a newly constructed house was 162.2 square metres. In 2005 it was 247 square metres. That is an increase of 52½ per cent. The expectation of younger people of my generation has increased by that much over the last 20 years. It is something that we need to take into consideration. People who are borrowing money at the moment need to factor in that, if Labor were to be elected at the end of the year, they would need to be able to afford interest rate rises that would come under a Labor government. They have come before under Labor governments. If you look at the way in which Labor governments are managing the states and territories, you will see that the economic policies would be replicated at a federal level by federal Labor, and that would mark a stark increase in interest rates in this country. It is a sobering discussion, but it is one that has to be had. It is a message that we need to send clearly to younger Australians and in particular to younger Australian families.

The issue of home affordability in my own state of Queensland is particularly relevant, because councils in Queensland—indeed, right around the country—have been forced to pass on to consumers, to young families out there buying blocks of land, costs that have been passed on to them by state governments. The state government in Queensland, through their infrastructure planning act, have added tens of thousands of dollars to the price that consumers in Queensland are paying today for land.

When you talk to councils around the state, in many cases they are as frustrated as the federal government is at this development. What has happened is that there has been a shift in costs from the state governments to local government authorities for roads or upgrades of sewer systems. These costs would perhaps historically have been met by the state government but they are now being passed directly onto consumers by developers through the increased price of land. That is an alarming trend. On my assessment, it is not one that is likely to abate any time soon. That is of great concern to all Australians, because what it means is that Labor is locking younger people out of home loan affordability. Labor governments in every state and territory are contributing to the generation of Australians currently in the market being unable to afford a house. The great Australian dream should be preserved. We should protect it at every opportunity.

At the moment, there seems to be a renewed level of dictatorship in Queensland by Peter Beattie, who is showing himself as somebody who will not listen to the people of Queensland. Peter Beattie is behaving in a deplorable way, not just in relation to amalgamation but in relation to consultation with councils and others within the property industry who have some ideas and who are talking about ways in which they can make homes more affordable. Peter Beattie at the moment is showing arrogance by the way in which he is conducting his activities. That was highlighted by his comments yesterday, when he said that if he wanted he could be in power in Queensland for the next 100 years. That shows the arrogance of Labor at a state level and the underlying arrogance of this Labor opposition as well.

The Labor Party have had a lot to say about home affordability, but nothing of substance. This of course is a common theme that is running through the federal Labor Party at the moment. They have focus groups in which they shop these lines about home affordability, the economy or environmental matters—whatever it might be. Mr Rudd goes off with these focus groups and goes off talking to Hawker Britton, his specialists and his union boss advisers, about what it is that they should be saying in the media. Give Mr Rudd marks for his mastery of the media at the moment. He gets out there with these glib one-liners, says that he is going to fix it and then pulls back from the media without giving any policy detail or substance whatsoever for consideration or scrutiny. The Australian people are starting to see that the bloke who sits opposite and wants to be Prime Minister has no substance to him whatsoever. The reality is that that will come home to bite the Leader of the Opposition very quickly, because you cannot run around in this country putting up one-liners and saying that you have all the answers to all the problems and then, when you are asked for the policy detail, have nothing to show for it. Nothing better demonstrated this than when a 30-page document on the issue of home loan affordability was put out by the Leader of the Opposition that showed nothing of substance whatsoever. (Time expired)

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