Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Hansard source

That is exactly right, Senator George Campbell: who was the Treasurer of Australia in October 1981? I would hope that we remember. It was Mr Howard, the current Prime Minister. So, if we want to look at history and we want history lessons, the fact is that the period of the highest mortgage rate in this country was when the current Prime Minister, Mr Howard, was Treasurer of the country, back in 1981. I want to come to some history a little closer to now—that is, at the last election, when Mr Howard said: ‘Trust me, trust me. We’ll keep interest rates low.’ He said:

... the Australian people will make decisions about my credibility. They’ll ... make a decision about who they better trust to keep their interest rates down.

I have to concede, unfortunately, that some of the Australian electorate did trust the Prime Minister. He had the record of Australia’s highest interest rates, back in 1981, and they did trust him. They trusted Mr Howard when he said that there would be no GST—never, ever. They trusted him.

Of course, at the last election we heard nothing about the radical reform of industrial relations. We heard a lot about interest rates and keeping them low, and what do we have today? Very high interest rates from the point of view of the average consumer and household. There was not one mention of radical reform of industrial relations. Of course, we got that dished up to us after the election. There was not one mention of that in the election campaign, but there was the continual mantra of ‘trust me, I’ll keep interest rates low’. What do we have today? As a consequence of today’s interest rates, Australian households have a significantly higher mortgage repayment than they had back in 1989—significantly higher.

This government is fond of making international comparisons when it suits them. We had it today from Senator Minchin. He did not once mention the words ‘interest rates’ this week, but he did want to go to international comparisons. Even on this score, this government’s record is absolutely appalling. If we look at the international experience, what is happening overseas with housing interest rates, we will see that, of the 11 comparable economies, Australia now has the second highest interest rates in the world, at 7.8 per cent. We are exceeded only by New Zealand, at 9.55 per cent. Countries such as the UK, the US, Italy, Sweden and Japan all have housing interest rates lower than us. So, for a government that are fond of making international comparisons, they never want to quote the figures on international interest rates because we have very high interest rates by comparison. They do not want to. They are now severely embarrassed by the three interest rate rises since the election, but, of course, they do not take responsibility. Their mantra is, ‘It’s not our fault,’ or: ‘They’re still low. It’s not our responsibility. We’ll take responsibility when there’s good news, but we won’t take responsibility when there’s bad news.’

I think that is a sign of a government in decay. It is a government that has lost touch and direction. Senator Scullion, you can smile, but the average punter on the north-west coast of Tasmania does not think that the government has any particular direction. We will see what happens at the next election. The average punter on the north-west coast of Tasmania does not think that the government is performing particularly well at the moment when they fill up their car with petrol and try to pay for it or when they pay the ever-increasing bill at the local supermarket. The Prime Minister at the last election proclaimed trust about keeping interest rates low, and what has occurred is that the average family repayment has increased significantly since the last election.

This is an important debate. It is very important that we have affordable housing in this country. Owning your own home is a mainstay, a central ethos, of Australian economic and social life. The Labor Party and I worry deeply about the financial pressures that Middle Australia is currently experiencing. On top of that, we have the industrial relations reform, so-called, which is putting further significant pressure on them. The average family faces cuts in wages and conditions.

This is a government that is out of touch. It is arrogant. It spent a couple of weeks brawling over who was going to get the top job—Mr Howard or Mr Costello. We have had minister after minister failing in their policy responsibilities. In one case, the ‘minister for parrots’, Senator Ian Campbell, acted illegally and got caught out undermining investment in this country. Investment is necessary for economic growth. As for Senator Coonan, the future economic growth of the country is in her hands—the future of our telecommunications system, and what a shambles that has turned out to be. We will have a second minister for communications before long, the way it is all headed. A second minister for industrial relations was appointed to try and explain away the consequences of reform. We will need a second minister for communications before long. One thing that we can safely say is that there is considerable doubt that the Treasurer, Mr Costello, will ever get the top job from Mr Howard, after the events of recent months.

Housing affordability is important, and interest rates and their impact are central to that level of affordability. This government has presided over a very sorry record since the last election. There have been three increases in interest rates, to 7.8 per cent—a significant addition to Middle Australia’s household financial burden—on top of increased petrol prices and food prices, but, as I said, not including bananas. If the Prime Minister or the Treasurer went into the local supermarket and excluded bananas from their household shopping, they would notice the difference—if, indeed, they ever do this. I think they are totally out of touch. They probably do not remember the last time they went shopping. Food prices are increasing. They are the constant worries and concerns of low- and middle-income Australia. What did we get dished up from the Prime Minister, Mr Howard, at the last election? ‘Trust me, we’ll keep interest rates low.’ Well, I hope they remember. (Time expired)

Debate interrupted.