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

My question is to Senator Minchin, the Minister representing the Prime Minister. Does the minister recall saying in question time yesterday:

... with an average wage rise of $850 a month in the last five years repayments on the average home loan have risen by $740 a month, some $110 less than the increase in average wages.

Is the minister seriously saying that working families should be grateful for the $110 they have left over after spending $740 a month more on home loan repayments? Haven’t working families spent much more than this extra $110 a month since 2002, paying for a 20 per cent increase in food prices, a 45 per cent increase in petrol prices and an 88 per cent increase in childcare costs? Isn’t this government so out of touch that it has no idea about the pain that higher mortgage repayment increases have on working families?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I want to assure Senator Wong that this government’s primary concern is the welfare of ordinary Australian families, and that is why we are very proud of the fact that under our government there has been a substantial increase in real wages, some 30-something per cent—that is after inflation—whereas under the previous Labor government there was effectively no increase in real wages during their whole period of government. That is why we are proud of the fact that under our policies inflation has been contained to 2½ per cent on average over the period of our government, compared to 5.2 per cent on average over the previous Labor government—double the rate of inflation that has occurred under our government on average.

It is very interesting to look at some of the breakdowns of prices. Of course it is in the Labor Party’s interest to highlight areas where they claim certain price increases have occurred, completely ignoring the increase in wages that has occurred. The figures I quoted in relation to mortgages and wages were taken from CommSec; they are not government figures. They are produced by CommSec looking at the data available from 2002 to 2007. They do show that average wages have increased more than average rents. They do not like the facts, but those are the facts. Australians are to that extent in a better position because we have got policies in place that ensure that their wages increase faster than their prices and their costs, so they are better off under our government.

Have a look at some of the basics. As I said, the average wage over the last five years has increased by 25 per cent; whereas the CPI has gone up only 14 per cent. In 2002 the average weekly wage could buy 531 litres of milk. Today the average wage can buy 710 litres of milk. In 2002 the average weekly wage could buy 727 litres of petrol. Today the average wage can buy 1,293 litres of petrol. In 2002 it took an average wage earner 38 weeks to buy a new Ford Falcon compared to 34 weeks today. The facts are that Australians have, under our government, seen their wages rise faster than costs. You do not like the facts, but those are the facts.

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

Mr President, I ask a supplementary question. Does the minister understand that Australian families with a $300,000 mortgage are now $433 a month worse off due to the nine consecutive interest rate rises under the Howard government? What benefit is it to these families if they can buy 700 litres of milk when they are facing an 88 per cent increase in childcare costs, a 45 per cent increase in petrol prices and a 20 per cent increase in food prices? Minister, aren’t these working families justified in thinking that the Howard government has broken its election promise to them to keep interest rates at record lows?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

What we said to the people in 2004 was that interest rates for their home mortgages would always be lower under our government than they would be under the Labor Party, and we stand by that, and we will continue to assert that that is the case, that interest rates will be lower under us than they would be under Labor. The Australian people have the empirical evidence to substantiate that claim.

Opposition Senators:

Opposition senators interjecting—

Paul Calvert (President) Share this | Link to this | Hansard source

Order! Senators on my left, come to order!

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

As I said, the standard variable home loan rate has fallen from 10.5 per cent when we came to office—what we inherited from Labor—to around 8.3 per cent today. That interest rate reduction would save around $449 per month in interest charges on an average new mortgage of $245,000. So there is all the evidence that under us interest rates are lower than they are under Labor, and that is proven empirically by our record in office and your disgraceful record in office.