Sussan Ley (Farrer, Liberal Party, Shadow Minister for Housing) Share this | Link to this | Hansard source

My question is to the Prime Minister. When will the Prime Minister stop watching household costs such as rent and child care go up and when is he going to do something about it?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

Following the earlier question from the honourable member for Wentworth concerning the impact on rents and housing costs generally, I would have thought there was an axiomatic relationship between interest rate rises and those costs. Therefore the proper question in economic policy is: what do you do to make it less likely in the future that there are further interest rate rises? The answer to that is called responsible fiscal policy. The answer to that does not lie in continuing the fiscal policy settings of the type that we inherited from our predecessors.

As the finance minister has repeatedly advised the House, with expenditure running in excess of five per cent of annual growth at the time at which this government assumed office, had that been perpetrated in the current financial year by this government then the impact of that on total final demand in the economy would have been unhelpful in terms of the overall inflationary pressures in the economy. In fact, it would have been more than unhelpful; it would have been decisively negative. It would have made the task of maintaining current interest rate policy settings on the part of the Reserve Bank even more difficult. Therefore, we believe that the responsible course of action when it comes to dealing with pressures in the housing sector is first and foremost to make sure that you have a responsible economic policy which does not put further upward pressure on interest rates and further upward pressure on inflation and, through that, further upward pressure on interest rates.

The second point in answer to the honourable member’s question goes to how you deal effectively with those who are suffering from housing policy stress, those who are finding it difficult to cope with housing policy challenges into the future. What do you actually do through housing policy itself? The question related to interest rates and rents; therefore, the question deals with what you are going to do about housing more generally.

For the first time in 12 years the government of Australia has a housing minister. Those opposite did not have one. That was the priority they attached to the housing portfolio. They did not have a housing minister, they did not have a housing portfolio and we know for a fact that they never had a housing policy. What we have done by contrast is put forward some $1½ billion-plus of housing programs which deal with, firstly, assisting first home buyers to accumulate enough savings to put a deposit on a home, because that is very difficult; and, secondly, investing in bringing down some of the infrastructure charges, particularly those impacting on new housing developments around the country. That is another half a billion dollars-plus program that we have put forward.

There is a third policy, specifically in relation to the point raised by the honourable member for Farrer, which goes to rents, and affordable rents. In our work around the community it is quite plain that this is a situation faced not just by those paying mortgages or seeking to save for mortgages but by those currently paying rents and facing huge challenges in balancing the family budget on that score, which is why we have introduced a half-a-billion-dollar National Rental Affordability Scheme with the intention of making it possible for private sector investors in the sector to create a large number of additional units—over time, 50,000 units—of affordable rental accommodation across the country. These are practical measures in the housing policy space.

But I go back to my first premise. None of this is possible unless you have responsible economic management, and you do not have responsible economic management if in the current environment you are launching a $22 billion raid on the surplus, because the impact of that is to put further upward pressure on interest rates, which is disastrous for all people out there in the economy.