Brendan Nelson (Bradfield, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is to the Prime Minister. I refer the Prime Minister to comments from the Minister for Families, Housing, Community Services and Indigenous Affairs in relation to the NATSEM housing affordability statistics that were released today, where she said the best way to help poor young homebuyers is:

... a tax privileged way ... with our first home saver accounts.

Can the Prime Minister now explain why a person earning $200,000 a year is entitled to a government co-contribution of $1,500 but an apprentice earning $12,000 a year, saving for her first home, is entitled to a government co-contribution of only half that, at $750?

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

I find it remarkable that the opposition asks questions about housing, given that for 12 years there was, firstly, no minister for housing, secondly, no department of housing and, thirdly, no housing policy on the part of those opposite. When it comes to practical measures to assist those who are seeking to buy their first home, the first obstacle they are up against is high interest rates. The party of new-found compassion, those opposite, seem to overlook the fact that interest rates rose 10 times in a row in their period of office. The reason interest rates rose 10 times in a row and have risen twice since then is, in large measure, that the previous government allowed the inflation genie out of the bottle. When we took over office, inflation was running at a 16-year high and we had interest rates that were the second highest in the developed world.

Brendan Nelson (Bradfield, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order on relevance. The question to the Prime Minister and his social justice truck is: why does a person on $200,000 get twice that of a person on $12,000?

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The Leader of the Opposition will resume his seat.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

To further my answer to the question, if you look at the measures, therefore, which deal effectively with the housing challenge facing working families, No. 1 is dealing with the inflation challenge. Let us actually look at the logic here. If you allow inflation to become uncontrolled in the economy, if you allow inflationary pressures to rise without acting on them, what happens is that upwards pressure occurs on interest rates, and then interest rates go up and then you squeeze people out of the housing market. There were 10 interest rate rises in a row—the world’s second highest interest rates, when we assumed office, as far as the developed economies are concerned—and then on top of that inflation was running at 16-year—

Sussan Ley (Farrer, Liberal Party, Shadow Minister for Housing) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. The Prime Minister needs to answer a simple question: why does a person on $200,000 receive—

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for Farrer will resume her seat.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

The core of the challenge for working families and those struggling with interest rate pressures now is a result of this: a previous government which did not contain inflation and which put upward pressure on interest rates, and this, as a consequence, flowing through to cost-of-living pressures for working families. This is why inflation remains the core article of our response to the economic challenges which face Australia today. Inflation and interest rates affect working families.

On the substance of housing policy, in response to—

Opposition Members:

Opposition members interjecting—

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

If those opposite think that housing policy can be addressed in the absence of inflation and interest rates, I find that a remarkable departure from core economic logic. Why those opposite seem to respond so audibly and with great agitation to the logic I was pointing out before is that they were responsible for inflation getting out of control, beyond the three per cent margin, and they were responsible, as a consequence, for upward pressure on interest rates. Therefore, they are responsible for the extraordinary mortgage rate pressures which are currently being experienced by working families.

Prior to the election, we undertook to implement three core sets of housing policies. One is the first home saver accounts. The second relates to what we do for affordable rental accommodation. The third relates to—

Brendan Nelson (Bradfield, Liberal Party, Leader of the Opposition) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order on relevance. If the Prime Minister cannot answer the question, can he just say so.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

It is not a point of order.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

These policies—a total funding commitment of about half a billion dollars and in toto about $1.6 billion—represent one key fact: $1.6 billion more than those opposite provided for public investment in the housing challenges of working families. The housing policy they took to the last election adds up to this figure: one big, fat zero. On the pre-election commitment—

Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order on relevance. It relates to the last section of the question. Can the Prime Minister explain why a person earning $200,000 per annum is entitled to a government co-contribution—

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member will resume his seat. Member for Fisher, is this on a further point of order or the same point of order?

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Mr Speaker, a further point of order. Under standing order 86, when a point of order is taken the Speaker has an obligation to give a ruling.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The member for Fisher will resume his seat. The member for North Sydney in selectively repeating part of the question did not mention the first part, which was in relation to a NATSEM report. The Prime Minister is in order.

Kevin Rudd (Griffith, Australian Labor Party, Prime Minister) Share this | Link to this | Hansard source

On the whole question of housing affordability, which the NATSEM report goes to, you have to deal with the inflation-interest rates challenge and you have to deal with the other housing policy settings. We have put forward one such policy. On the question of the pre-election commitment which we made on the first home saver accounts, we stand by everything we put to the Australian people, including the eligibility criteria that we outlined there. We believe this is a good piece of public policy, and the reason is that it is the first time it has been embraced in this country. For 12 years, those opposite sat silently, idly by while so many working families, so many Australians, dealing with the mortgage challenge they faced as a consequence of successive interest rate rises were simply left to languish. The response by those opposite, the party of new-found compassion, was in these words: ‘Working families have never been better off.’

Let me conclude by saying this: our pre-election commitments on housing, which are $1.6 billion more than those opposite—the new-found party of compassion—will actually be honoured. We do not divide them into core promises and non-core promises. One of those commitments was the first home saver accounts. The criteria for the first home saver accounts were articulated clearly before the election. We have a mandate to implement them in the manner in which they were put to the people, and implementing them we are.