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

I thank the member for his question, because this is certainly a decision that working families deserve. They are still doing it tough. They are certainly doing it tough. But a bit of relief is certainly welcome. So for the Reserve Bank to take this decision today is certainly very welcome—although it does not seem to be supported by those on the other side.

Today’s cut by the Reserve Bank will put nearly $600 a year back into the hands of a family with an average mortgage. Families have waited a long time for this relief. This is the first interest rate cut by the Reserve Bank in seven years. Some 740,000 families have never known a decision by the Reserve Bank to cut rates. It has taken seven years. And, of course, we know why that is the case: because Australian families had to endure 10 interest rate rises in a row under those opposite, and that added something like $400 a month to the mortgage bill of an average person with a mortgage—$400 a month. That was certainly the legacy of the member for Higgins—one that those over there are continually in denial over.

I have made it very clear indeed that I expect the banks to pass on the cut announced by the Reserve Bank today in full and in a reasonable time. I have now had handed to me some of the information about what the banks intend to do in passing on this rate cut. The NAB will pass it on effective from Friday, 5 September, Westpac will pass it on effective from 4 September and the ANZ and the CBA will pass it on effective from 8 September. That is certainly going to be welcomed by many people out there. It will be welcome relief, but there is still so much more to do to take pressure off inflation and interest rates. I will quote from the first paragraph of the Reserve Bank’s statement today:

Inflation in Australia has been high over the past year in an environment of limited spare capacity and earlier strong growth in demand.

What is that talking about? It is talking about the 20 warnings that those opposite received from the Reserve Bank over a three-year period. It is talking about the need for nation building to solve capacity constraints in the economy. Of course, then there was the reckless spending by those opposite that the member for Higgins admitted to in the Howard biography. What we are going to do is put in place a responsible economic policy which deals with investment in the future through nation building and which puts in place a disciplined fiscal policy. I think you can tell that those opposite today do not really understand how tough families out there are doing it. For the Leader of the Opposition this is just some form of political opportunism. We have seen that in question time today. He wants to score a political point about this instead of welcoming this move. This is very welcome news for Australian families, very welcome news for the Australian economy, and it is good news that should be celebrated by all in this House.

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