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

I move:

That the Senate take note of the answers given by the Minister for Finance and Administration (Senator Minchin) to questions without notice asked today.

Over the last week, and before that of course, the Labor opposition has been focusing on the recent increase in interest rates. Last week we saw the fifth increase in interest rates since the last election. Today, yet again—although I was not here last week—I thought we saw from Senator Minchin, in the responses he gave, an example of how, after 11 years in government, this government and particularly the Prime Minister, Mr Howard, are so stale and out of touch with the Australian people. Frankly, ‘dribble’ would be the best description of the response coming from Senator Minchin’s lips in terms of argument to justify the five increases in interest rates that we have seen since the promise made by Senator Minchin and the Liberal government at the last election that they would keep interest rates at record lows. It is a quote from Liberal Party advertising at the last election that they would keep interest rates at ‘record lows’.

Senator Minchin made the amazing claim today that upward pressure on interest rates would occur as a result of Labor policy to abolish Work Choices. I would point out that since Work Choices was introduced there have been four increases in interest rates; four of the last five increases in interest rates have occurred since Work Choices was introduced. So if correlation were causation then it is Work Choices itself, the government’s very own legislative agenda and radical and unfair industrial relations changes, that have increased interest rates. We have seen four of those interest rate increases since Work Choices was introduced.

The question I pose today to Senator Minchin relates to this morning’s statement by the Reserve Bank. I think Australians cannot but be concerned about the observations made by the Reserve Bank, which expressed serious concern about inflation. It stated this morning that inflation appears likely to be somewhat higher than earlier expected. If inflation trends are going up—and they are—this very definitely places upward pressure on interest rates, despite the commitment by the Prime Minister, Mr Howard, at the last election, through the advertising that was conducted by the Liberal government, that it would keep interest rates at record lows. Of course we do not have interest rates at record lows any more. It is a matter of fact that interest rates are not at record lows. When we look at the cost of purchasing a house in dollar terms today we find that families need to earn seven times the average yearly wage to purchase a house. Ten years ago, or in 1996, it required four times the average yearly wage to purchase a house. Since the last election we have seen five interest rate increases, despite the commitment by the Prime Minister and the Liberal government that they would keep interest rates at record lows.

We had another interesting reference this morning by the Prime Minister to the Liberal Party advertising that it would keep interest rates at record lows. On the radio this morning Mr Howard finally admitted that Liberal Party advertising at the last election had included that commitment of keeping interest rates at record lows. Until now the Prime Minister has claimed that what he said was different from Liberal Party advertising. He has tried to make out that the Liberal Party advertising campaign at the last election—even though it said ‘keeping interest rates at record lows’—was not Mr Howard’s commitment and that somehow they were different. That is an absurd argument. He finally fessed up this morning when he acknowledged that the TV ad did make the promise that interest rates would be kept at record lows. Rather astoundingly he went on and said, ‘Look, that did appear in an ad, which I understand disappeared after the first week.’ I have got news for the Prime Minister: that ad is still on the Liberal Party website. (Time expired)