Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Hansard source

there was double digit inflation and interest rates at 20 per cent. Let’s talk about what families are paying today as a proportion of their household disposable income under this government. On the other side they are all hanging their heads because they know families are paying more now than they ever were under Labor. Nine per cent of their household disposable income is going on mortgage interest repayments. It was six per cent under the Labor government. They are paying more now than they ever did under the previous Labor government, but we still had the Prime Minister before the last election and we still have Senator Minchin today going on about historically low interest rates. The reality is that more is spent by households in terms of disposable income on mortgage interest repayments than there ever was under the previous Labor government. Let’s get that clear.

We saw the Prime Minister at the last election running around the country, happy to take the glory, as he perceives it, for the interest rate position. Interest rates have gone up three times since the Prime Minister and everybody else on the coalition side was running around the country saying: ‘Interest rates are very low. They’ll always be low under a Liberal government.’ Are they taking responsibility for those three interest rate rises? They are happy to take responsibility when they are low. Are they happy now to take responsibility for seven successive interest rate increases, including three since the last election? Will you see the government taking responsibility for that? I doubt it very much. Perhaps even more extraordinary is that we have the Prime Minister now on record trying to soften people up and saying, ‘Maybe we need an interest rate rise because inflation’s so high,’ which seems a very far cry from what he was saying in 2004, when he promised to keep interest rates low.

I want to comment on something that did not seem to get much airplay in the discussion about interest rates in question time today—some of the things that are fuelling the hikes in inflation. There has been a bit of discussion about this. A couple of weeks ago the St George Bank economist analysed, amongst other things, the effect of capacity constraints in the economy on interest rates, on underlying economic growth and on inflation. That showed quite clearly that we have had for a significant period of time capacity constraints in the economy.

What has this government done? Has it invested in the supply side? Has it invested over its 10 years in government in skills and in education and training? Has it invested in infrastructure? The answer is a resounding no. We know what has happened to public investment in education under this government. We know that we have gone backwards by around seven per cent. Most nations in the OECD have gone forwards. We know that infrastructure development has descended to a National Party pork-barrelling exercise under this government. They have no national plan for infrastructure but they are very happy to play electoral politics with it.

The fact is we have had three successive interest rate increases since the Prime Minister ran around the country telling people he would keep interest rates low. We have had seven successive interest rate increases. We have inflation running at 3.9 per cent and we have the Prime Minister softening up the electorate, telling everybody, ‘I think we need an interest rate increase because otherwise inflation’s going to get too high and we’ll have even more.’ That is from a government that has consistently over the decade, until pressed to just recently, failed to strategically invest in supply side policies such as education and training to assure that Australia has a skilled workforce. (Time expired)