Scott Morrison (Cook, Liberal Party) Share this | Hansard source

Mortgages are a key issue for my constituents in the electorate of Cook. There are 15,361 dwellings being purchased, which represents about a third of all the dwellings in my electorate, and more than 50 per cent of constituents—based on the last census—had a mortgage payment greater than $2,000 per month. The electors of Cook have steadfastly supported the Liberal Party because of our economic management credentials. It has been the Liberal Party to whom they have entrusted the economic management of this country. The last time that the electorate of Cook elected a Labor member was at the time of the Whitlam government. He was dispensed with, along with that government, for many reasons but principally, I would say, because of that government’s economic record.

This motion deals with interest rates, so let us consider some facts on interest rates. Under the coalition, the average interest rate was 7.25 per cent; under Labor, it was 12.75 per cent. The government likes to talk about 12 straight interest rate rises. Let us look at the quantum of those increases and the period of time. Looking at the standard variable rate under the coalition, from April 2002 interest rates were 6.05 per cent; at November 2007 they had risen to 8.55 per cent. That is a 2½ percentage increase over five years and seven months—67 months. Labor could do a lot better than that, I can assure you! In March 1985 interest rates were 11.5 per cent under Labor, and in just 13 months they went to 15.5 per cent—that is a four percentage point increase. In June 1988 they were at 13.5 per cent, and in just 12 months they rose 3.5 points to 17 per cent. In August 1994 they were at 8.75 per cent, and by December 1994—just four months later—they had gone up 1.2 percentage points. When Labor put down the pedal on interest rates, they went up on average 0.3 per cent per month. Under the coalition, they went up by 0.04 per cent per month. So under Labor we had an interest rate accelerator, when they put the pedal down, that was 7½ times higher than under the coalition. And not once, I should note, did the starting point under Labor ever get lower than the finishing point under the coalition. So it is just bizarre to have those opposite come into this place and deliver lectures on interest rates when Labor have written the book on how to increase interest rates in this country and have presided over an interest rate accelerator that exceeds all others.

Inflation at this same time under the coalition averaged just 2½ per cent. If you look at the headline rate for inflation, you see that as of December 2007 it was at three per cent, which was in the band set by the former Treasurer. Under Labor, the average was 5.2 per cent. A lot is also said about what is driving inflation. The shadow Treasurer made a very good point today where he showed that the Reserve Bank governor has given the government two out of five for their five-point inflation plan. Only two issues that are referred to by the government were covered by the Reserve Bank governor. The Reserve Bank governor also made a very good point back in January when he said that inflation expectations up until that point were under control. What has happened since then? The first figure to come out on inflation expectations, from the Melbourne Institute, shows that inflation expectations have risen from 3.8 per cent to 4.3 per cent. That is what happens when you talk about ‘genies’ and ‘bottles’: you drive inflation expectations. It is very concerning to those who have mortgages—and around 15,000 in my electorate do—to see a reckless Treasurer bounding about our financial markets, talking about genies and bottles and driving up inflation expectations.

The Reserve Bank governor talks about many things when he talks about inflation. He talks about fuel prices, which the government said they would keep under control. That is what the people of Australia are now looking to the government for; the government have made the promise and they will need to be held to account for it. They are the ones who are going to have to deal with $80 billion worth of state government debt on their watch; they will have to address that also. The previous government has left an excellent record on interest rates. (Time expired).

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