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

I move:

That the Senate take note of the answers given by the Minister for Community Services (Senator Scullion) to questions without notice asked by Senators Sherry and Hurley today relating to interest rates.

It is rare that I thank a minister because normally we get evasive, out-of-touch answers that indicate the government’s age and its contempt for the parliament. But I have to say that on this occasion Senator Scullion was remarkably frank in his acknowledgement when he said that interest rates today are higher under this government—meaning his government—than they have ever been. He went on and said again that interest rates today are higher under the Howard government than they have ever been. It was quite a remarkable admission from Minister Scullion in today’s question time. What we got from the Howard Liberal government at the 2004 election was a promise that they would keep interest rates at record lows. Today we have a remarkably frank admission from Senator Scullion that interest rates today are higher under this government—that is, the Howard government—than they ever have been.

This just goes to make the point that Labor has been referring to on many occasions since the last election. We have had five interest rate increases since the last election. We have had nine interest rate increases in a row. And, to really rub salt into the wound of many struggling Australians who are paying higher interest rates on not just home loans but also on credit cards in particular, interest rate increases by some providers after the last increase by the Reserve Bank have been above the quarter-point increase that occurred. They have been above that last quarter per cent increase. There are a number of complex reasons for that, but it does highlight the ineffective and, indeed, false promise made by the Prime Minister, Mr Howard, at the last election that the Howard Liberal government would keep interest rates at record lows.

The fact that Senator Scullion today admitted that interest rates today are higher under this government than they have ever been—today he could actually admit that—is not of great consolation to Australian families that are battling under these higher interest rates. The nine interest rates hikes in a row under this government have added some $457 a month to a $300,000 mortgage. This is what the Prime Minister, Mr Howard, meant apparently when he said that he would keep interest rates at record lows: you would get an increase of $457 a month on your mortgage. That is the outcome of the solemn promise made by Mr Howard at the last election that he, leading this government—an out-of-touch government, a stale government—would keep interest rates at record lows.

It was one of those tricky promises from Mr Howard that we are so used to. It was another of his tricky disposable promises—say anything and do anything to get you through an election campaign. I think there are some good signs that the Australian public are starting to see through some of the trickiness of the Prime Minister. I will be interested to see whether the current Treasurer, Mr Costello, can see through the trickiness of the cobbled together promise that was given last week.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

L2.

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

Yes, L2. We now have a two-person leadership team. We can forget about the National Party, of course, the Howard-Vaile government. It is the Howard-Costello government. I notice Senator McGauran, the former National Party senator, nodding furiously. We can forget about the National Party.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

He is smirking.

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

He is smirking about it too—even better. There have been nine interest rate hikes in a row. That is hardly an example of keeping interest rates low. Of course, it is not just interest rates on housing loans; it is also credit card interest rates. So many Australians today depend on the use of their credit card because they are under significant economic pressure. They are paying more for child care, more for fruit and vegetables, more for health care and more for petrol, which is putting greater and greater pressure on Australians through higher interest rates and their credit card use. Of course, we have had so-called Work Choices, which has cut the wages and conditions of workers, particularly in industries such as hospitality and retail.

Concetta Fierravanti-Wells (NSW, Liberal Party) Share this | Link to this | Hansard source

Senator Sherry, if you want to know why new homeownership is fast becoming the diminishing Australian dream for many people, perhaps you should go and ask your state Labor colleagues. The stubborn refusal of state and territory governments to release enough land for new homes is forcing the price of house and land packages beyond the means of many hardworking Australians. It is a problem that can be tackled. Going back a bit in history—of course, they might say it, but they do not act on it—even one of your former housing spokesmen, Mr Melham, said:

We need to increase the availability of affordable land for the construction of new housing.

Mathias Cormann (WA, Liberal Party) Share this | Link to this | Hansard source

A no-brainer.

Concetta Fierravanti-Wells (NSW, Liberal Party) Share this | Link to this | Hansard source

Yes, of course it is a no-brainer; thank you, Senator Cormann. I take the Senate back to 2006, when the Reserve Bank Governor, Ian Macfarlane, told a parliamentary committee that the decline of new home affordability was all about house prices. I would like to quote what he said then, because it is very much still the situation. He said:

I think it is pretty apparent now that reluctance to release new land plus the new approach whereby the purchaser has to pay for all the services up front—the sewerage, the roads, the footpaths and all that sort of stuff—has enormously increased the price of the new, entry-level home.

If you want any further evidence, consider this disturbing fact: the price of land in Sydney between 1973 and 2003 rose by 700 per cent, while the cost of the housing component of house and land packages has increased by just four per cent over the same period. That is absolutely shocking. It is shameless the way that Labor continue to protect their mates in the states and territories by blaming interest rates. This could not be further from the truth. Interest rates have averaged 12.7 per cent during Labor’s 13 years in government compared with the low rates under the coalition. Have we forgotten interest rates of 17 per cent? How many people had to sell their homes when interest rates were at 17 per cent?

Mathias Cormann (WA, Liberal Party) Share this | Link to this | Hansard source

Senator Cormann interjecting—

Concetta Fierravanti-Wells (NSW, Liberal Party) Share this | Link to this | Hansard source

Yes, absolutely, Senator. Yes, interest rates are part of the equation and the Howard government will always strive to maintain economic settings to keep interest rates low. The decline in affordability is further accelerated by the array of state taxes and charges. The act of paying for a new home is just the tip of the iceberg when it comes to the costs that are faced by new homebuyers. Families are hit by a raft of property taxes, stamp duties, infrastructure levies and other development costs levied by state and territory governments, all on top of the purchase price. I think it is time that Labor state and territory governments abandoned the ill-conceived notion of ‘urban consolidation’—a byword, which has now become fact for loading more people on to existing services—and removing the financial shackles from new homebuyers. And why would they? We do not have the power to drop state taxes. The only people who can compel state Labor governments to drop state taxes are their own voters. We cannot make the New South Wales government or the Western Australian government reduce stamp duties. They get an absolute bonanza out of state duties in New South Wales.

If those opposite really are concerned about housing affordability, perhaps they ought to impose on their state counterparts to look at the raft of taxes, the stamp duty and, more importantly, the supply of land. That, in the end, is what is important here. It is simple: if you restrict supply the price goes up. It is all very well for those opposite to bleat; why don’t they take some time and make some effort and try to get their state counterparts to do something about this and not just talk about it?

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Today, in answer to questions by the opposition about the cost of living and housing affordability, we again saw a demonstration of how out of touch this government is. Today, in answering a question, Minister Scullion went straight to the point which Labor has been making for some time: that the government has failed to keep its promise to keep interest rates at record lows. We have now had five interest rate increases since the last election, when the government made that dishonest promise to the Australian people. And, of course, it is the ninth interest rate rise in a row—hardly a government with a strong record in this area.

They then go on and tell another mistruth about interest rate rises. They say they will always be lower under a coalition government than under a Labor government. But—oops!—they forget about when Mr Howard was Treasurer in 1982 and interest rates were in fact 22 per cent. Oops! They always seem to forget that matter—the highest that interest rates have ever been in this country, and who was Treasurer at that time? Mr Howard. It gives an absolute lie to the claim that interest rates will always be higher under a Labor government than under a coalition government, because it is simply not true. The government took to the last election a simply dishonest election ploy as part of a scare campaign, and this election will see another scare campaign. This is what the government do: they will try to confuse people with—

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Consumer confidence is at its highest!

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

Order!

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Now we are hearing the ex-National Party senator, Senator McGauran, talking about economic policy. What an extraordinary example that is—he has brought over to the Liberal Party the psychobabble that we normally hear from the National Party, and it just keeps going.

It did not take Minister Scullion very long—and we just heard Senator Fierravanti-Wells do it—to move straight to blaming the states for problems with housing affordability and the increasing pressure that all Australians are under through the governments’ policies. They go straight into blaming the states; they have no answers or policy position themselves. Of course, when interest rates were lower they wanted to take all the credit for the way the economy was going. But, as they get to their ninth interest rate increase in a row and the fifth increase under the government since they made that failed and dishonest promise in the last election campaign, it is everyone else’s problem. They wanted to take all the credit at one stage; now it is everyone else’s problem.

How often do we hear from the government that it is always the states’ fault? They always have to blame the states. When things are not going well, when the levers of the economy at the national level are not working the way the government set out, it must be the states’ fault. But when things are going well we never actually hear them say that it is anything to do with the states. Today I think Senator Brandis acknowledged that the reduction in unemployment had been happening since well prior to the election of the current government. It has been clearly trending downward since 1993. Are they crediting the states for that? No. The government will take all the credit for that, even though in many instances the states’ policies of manufacturing, development and economic growth contributed to that reduction. The complete lie is given to this argument time and time again.

The Prime Minister, John Howard, must have been mocking Australians when he claimed in the other place that working families ‘have never been better off’. He must have been mocking those Australian workers and families when family budgets are under pressure from all sides—childcare costs, petrol costs, grocery costs, rising mortgages and the inability of many families to make their mortgage repayments. Ten years ago the average home cost about four times the average annual wage. Today it costs about seven times the average annual wage. Prime Minister Howard mocks Australian workers; he is completely out of touch. He mocked Australians when he claimed that working families had never been better off. This is simply another— (Time expired)

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I rise to take note of answers given by government ministers in question time today, particularly with respect to interest rates, housing affordability and the future for small business in this country. The Labor senators have been waxing lyrical on the other side and talking about the fact that Mr Howard, as Prime Minister, is anti-families. Nothing could be further from the truth. The reason that this government has been so successful over many years—in fact, 11½ years—is that this is a government for families. This government has shown passion, compassion, care and support for families throughout Australia, not only in the big cities but in the rural and regional parts of Australia, including in my home state of Tasmania.

It is quite obvious to me that the Labor senators have become very cocky on the back of some recent polling. They are acting as though they are already government senators. They are very quietly and sneakily acting and strategising to ensure that some of their policies come to fruition.

The only way that the goods and services tax in this country can increase is as a result of wallpaper Labor governments in the states and territories and at a federal level. The only way the 10 per cent GST can go up in Australia is as a result of a Rudd Labor government being elected. I throw out the warning to the Australian people and to those in this chamber that I see the Labor senators being very cocky. They are sneakily going around and strategising how they can quietly and sneakily bring this GST into fruition if they gain government, and that is something that I am very worried about.

George Campbell (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Senator George Campbell interjecting—

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Senator Campbell, I am extremely concerned about it. You might deny it, but that is the only way that that can happen—under a Rudd Labor government—

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

Senator George Campbell!

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

when you have wallpaper Labor governments all around this country.

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

Senator Barnett, address your comments to the chair. Senator George Campbell, you have not got the call.

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy President, I thank you for that and for bringing the attention of the Senate to that very important matter. That is a concern I have, and I am going to continue to highlight those concerns in the lead-up to the election this year, as I will with respect to interest rates.

This is a very important matter. In 1989, we had 18 per cent interest rates under the Labor government. For 1.2 million small businesses in this country—in my home state of Tasmania there are over 34,000 small businesses—this could be crucial. This will be critical. I know what the small businesses and the farmers were paying in interest on their overdrafts at and around that time because I was there. I was aware of it and I was concerned for my colleague small businesses. This government—that is, the Howard-Costello team, the team that is leading Australia—is very much pro small business. Under Labor, businesses are going to get more red tape, and I can assure those in this chamber that the interest rates under our coalition government will always be lower than they are under a Labor government. The record is there. The interest rates are higher under a Labor government. You have seen the averages. I refer to the mortgage interest rates, which are still more than two percentage points lower than their March 1996 levels of 10.5 per cent. For the average new mortgage of $245,000, this reduction in interest rates saves households $449 a month in interest payments. This is the figure that Senator Gavin Marshall was referring to in terms of the increase over the last 11 years, but he did not refer to the average new mortgage and the reduction in interest rates saving households $450 a month in interest payments since March 1996.

That is a great result for Australian families, and I want to thank Mr Howard. The Treasurer, Peter Costello, is the finest treasurer Australia has ever had—and, in fact, one of the finest treasurers in the world today. That is recognised very broadly in many quarters around the world, not only in the OECD countries, and it should be acknowledged.

Finally, the potential Rudd Labor government—the Rudd opposition at the moment—is a policy black hole. There is a black hole on their website with respect to tax and transport. It is a policy black hole. It is a ‘me-too’ response. They are superficial in policy development. There is no substance to it, and it is a complete contrast to the Howard-Costello team.

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

I also wish to take note of the answers made by Minister Scullion during question time. The Liberal Party are obviously running very scared at the moment. Senator Barnett refers to the GST and raises the scare tactic, which he assures us he will repeat, about Labor state and federal governments raising the GST. I really do not think that the Liberal Party should talk too much about the GST, because it might remind people that, on top of the cost-of-living pressures that they have, 10 per cent of every bill that they pay goes to GST. Ten per cent of every item, apart from fresh food, that they pay for goes to GST.

The Labor Party has no intention of increasing the GST because we understand the kinds of cost pressures that households are facing with the high prices and the increase in prices today. The Labor Party, understanding that, has no intention of adding to those cost-of-living pressures, the pressures that in the past year alone have seen a rise in rents by 5.2 per cent, education costs by 4.3 per cent, health costs by 4.1 per cent and housing costs by 3.6 per cent. We know that they are the kinds of pressures faced by working families today.

This Liberal government are so out of touch with that reality that they go off into flights of fancy about how families have never been better off than they are under this government. We know that that is absolute nonsense and that families are really suffering from cost-of-living and housing pressures and are struggling to make ends meet. The minister responds with talk about reduced unemployment levels under this government. It is true that unemployment levels have been reduced. What is also true is that, during this current term of government, the government introduced Work Choices, which makes those jobs far more precarious than they have ever been. Work Choices has made overtime rates a much more precarious proposition, has made casual work much more common and has the prospect of forcing wages down for those workers so that they cannot afford to meet the increases in costs that we were talking about. Far from a job allowing people these days to buy houses, it means that they are unable to be certain that their wage will meet those increased mortgage payments.

The government challenges us to produce policies in response to that. Mr Kevin Rudd, the leader of the Labor Party, has produced policies in response to that. He has said that he would appoint a petrol commissioner to monitor and investigate petrol price gauging and collusion. He has said he would direct the ACCC to monitor grocery prices and to publish a periodic survey of price movements. He has said he would instigate a public inquiry into grocery prices to get a better understanding of what is driving up prices and expand Labor’s price watch to survey supermarket prices and publish them on a website. This is the Labor Party saying that they understand the pressures that families are facing.

The Labor Party also understand housing pressures and, rather than whingeing about the states not responding, they have done something about them. At a housing forum, and later in Adelaide at the Press Club lunch that I attended, Mr Rudd produced policies in response to that. He has talked about having a national affordability housing agreement in conjunction with the state governments. He has talked about Labor’s affordability fund for housing, which would look at infrastructure and reduce the amount that it costs to buy land and to produce housing around Australia. This is a fund that would help up to 50,000 families buying their first home. The Labor Party is looking at practical measures to help families. This government is so out of touch that it has lost any contact with the kind of reality that members of the Labor Party understand very well. (Time expired)

Question agreed to.