House debates
Wednesday, 9 August 2006
Adjournment
Interest Rates
7:30 pm
Chris Bowen (Prospect, Australian Labor Party) Share this | Link to this | Hansard source
Tonight I wish to raise a vital issue of importance in my electorate and across the country: interest rates, of course. This week we have seen some extraordinary outbursts from members opposite. First we had the member for Wentworth, who believes the reaction to the recent increase was ‘overblown’. Then, amazingly, the member for Greenway said that she did not see interest rates as a major issue and had not been contacted about interest rates by people in her electorate. Should the member for Greenway claim to have been misrepresented, let me share her exact words with the House. I quote: ‘Look, I really have not had people raise interest rates as a major issue for them.’
The member for Greenway was very happy to campaign on interest rates before the election, as though it were a very serious and major issue before the election. The member was happy to put out pamphlets with slide rules showing what extra you would pay with an increase in interest rates. She was very happy to take out advertisements in Blacktown newspapers, promising to keep interest rates at record lows. But, after the election, suddenly it was no longer a major issue. If people had kept those calculators they could have seen that, on an average mortgage in the seat of Greenway, their repayments would have gone up $108 a month since the last election. Small businesses could use the pamphlet to determine the increase in their repayments on their major loans to keep their businesses afloat.
The members opposite would say, ‘Yes, of course, but interest rates were 17 per cent under Labor.’ Of course there is the disingenuous sophistry of the Prime Minister, who says interest rates will always be lower under a coalition government than a Labor government—a claim that is impossible to prove or disprove in real terms. This claim has been taken to a ridiculous level by the honourable member for Flinders. I was recently reading one of my favourite publications: a magazine called the conservative. The member for Flinders wrote in a recent edition:
Post-election analysis reveals that the question of interest rates was perhaps the most significant issue in determining people’s votes.
We agree on that much. He goes on to cite an alleged Parliamentary Library paper, which he claims finds that interest rates have been historically higher under Labor governments than coalition governments. I will not comment on whether the paper had written across it: ‘Prepared at client request. Not for attribution to the Parliamentary Library.’
More disturbingly, the member for Flinders makes no mention of the international economic circumstances faced by each government. It is impossible for any government to keep interest rates very low when they are very high in the rest of the world. That would lead to substantial imbalances in the economy. Currently Australia has the second highest interest rates in the OECD. When interest rates were high under Labor in Australia in 1990, at 14.5 per cent, they were, for example, 14.8 per cent in the United States.
Chris Bowen (Prospect, Australian Labor Party) Share this | Link to this | Hansard source
When they were 16.8 per cent under Treasurer Howard in 1982, they were 12.3 per cent in the United States and 13.1 per cent in the United Kingdom. The other side has gone very quiet at the reminder of Treasurer Howard’s record with interest rates in 1982. Perhaps that is why the respected economic commentator Saul Eslake described the member for Flinders’s contribution as ‘fatuous’. I would add to that the descriptor ‘juvenile’.
More credible is a paper by Raja Junankar of the School of Economics and Finance at the University of Western Sydney and the German based Institute for the Future of Work. This paper compares the economic records of Labor and coalition governments, taking into account international factors over the 1980s and nineties. This paper finds that Labor was more successful than the coalition at keeping interest rates in Australia lower than in countries overseas. Honourable members opposite would hate to hear it, but they are going to hear it—and they are going to hear it more and more between now and the next election. They will not be allowed again to get away with the sophistry and the disingenuous lies that they told at the last election, because Labor has a proud record of keeping interest rates lower than countries elsewhere in the world. Household debt levels under this government are so high that people are now paying more in interest than they were— (Time expired)
Trish Draper (Makin, Liberal Party) Share this | Link to this | Hansard source
Mr Speaker, I rise on a point of order. I ask the member for Prospect to withdraw the unparliamentary accusation that he made in that speech.
David Hawker (Speaker) Share this | Link to this | Hansard source
I was listening closely to the member for Prospect. He did not make an accusation against any particular individual, as I heard it. I therefore believe he is in order. However, the time has expired.
Roger Price (Chifley, Australian Labor Party) Share this | Link to this | Hansard source
Mr Speaker, I rise on a point of order. The member for Indi is not in her seat, and she is interjecting. That is highly disorderly.