Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Housing and Urban Development) Share this | Hansard source

Senator Ronaldson speaks of history and speaks of a great deal. He fails to point out that there have in fact been eight interest rises in a row under John Howard; that, during the last federal election, John Howard asked Australians to trust him ‘to keep interest rates at record lows’, yet they keep going up. Mortgages are now increasing to the point where we can no longer say that there is such a thing as a small interest rate rise, because there are very few people in Australia at all who can say that they have a small mortgage. I remind the opposition benches of what the Prime Minister said at the Liberal Party election launch—and I am sure that Senator Ronaldson was there; I will remind him, too. The Prime Minister said:

My friends, we all prize the financial security of our families. Let me say this, and it’s not just my view, but it’s a view frequently expressed to me as I move around this country talking to Australian families. Nothing threatens that security more directly than the prospect of rising interest rates. Rising interest rates dominates everything else when it comes to family security. Just a tiny upward movement in interest rates more than devours a few dollars of taxation relief or additional family benefits. There is no economic credential for office more crucial than a capacity to keep interest rates low.

On that basis, you would have to suggest that the Prime Minister is condemned by his own words. According to the Reserve Bank, the ratio of household debt to income is at a record level of 157 per cent. Since the last election, repayments on a $300,000 mortgage have increased by $195 a month. John Howard’s interest rate hikes have hurt, because skyrocketing debt has seen that 85 per cent of disposable income, which was the level of debt in 1996, now move to 157 per cent, which the Reserve Bank estimated today. I can understand John Howard’s view that rising interest rates dominate—