Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

If there were ever a statement that crystallised in the minds of all Australians just how much this government—particularly the Prime Minister—has changed, it was when the Prime Minister made comments last week that an interest rate rise by the Reserve Bank might be the best thing that could happen for Australia.

Home ownership is not only the great Australian dream but also the cornerstone of economic opportunity and ongoing prosperity. For most Australians, to own a home is to have a physical testament to years of hard work and effort. A permanent address, some surety in the future and security for the family are of critical importance to the social and economic stability of all Australians. It is something that this government has actively undermined as it presides over a record high level of household debt repayment in this country.

While the Prime Minister has adopted the constant refrain that interest rates were nominally higher under the Keating government, it is widely accepted that the repayment burden has never been higher than under this government. Australians have never before struggled like they have presently in order to meet an interest rate rise, but Australians had never before held the same levels of household debt that they endure today.

As anyone who is paying off debt knows, it is not the level of interest rates that is the big consideration, it is the proportion of your pay packet required to meet your mortgage repayments that matters the most. That proportion has never been higher than it is right now. Until this government, Australians had never had to dedicate up to nearly 10 per cent of their take-home pay to service their mortgage. Under this government the capacity of many Australians to buy a house has eroded and it is eroding still. Under this government the proportion of household income required to service the mortgage is 50 per cent higher than it was under the Keating government.

The Prime Minister was asked about this fact today in question time and, as always when confronted about interest rates, he dodged the question. His position, as it has been previously, is to go back over the position of interest rates under the Keating government. The people out there who are servicing their mortgages and people who are struggling for home ownership do not care about the Prime Minister’s interest rate history lessons because they only care about today’s interest rate reality—the interest rate they are paying on the mortgage, on their business loans or on their credit card debt.

Homeowners, small business owners and anyone who has accumulated credit card debt care about one interest rate and one interest rate only, and what they know is that interest rate is now on its way up. They care about interest rates now because that is the rate that is used to calculate their mortgage repayments, their credit card payments and their small business loan repayments. But worst of all is that one thing that is being driven down is their property prices. Residents of western Sydney know that another interest rate increase not only means that a greater amount of the family budget will be eaten up in servicing mortgage repayments but also will mean another drop in the value of their property.

Homeowners and those who have invested in residential properties for retirement savings care little for the Prime Minister’s excuses as they watch the value of their investment fall, driven down by rising interest rates and the continual resetting of mortgage repayments to a much higher bar. They know that this government and this Prime Minister are out of touch with their concerns. Everything that this government has done of late is the exact opposite of what working Australians want. They did not expect to have their take-home pay and job security slashed through John Howard’s extreme industrial relations laws, they did not expect to be paying more and more for health care, health insurance and medications and they certainly did not expect to be paying out record amounts in servicing their mortgage repayments. They certainly did not expect to have their property values slashed as a consequence of this government’s actions. (Time expired)