Ms Anna Burke (Chisholm, Australian Labor Party) Share this | Hansard source

I do not think I recall ever seeing the Chief Government Whip that animated. I think it is because he does protest too much, because he understands the impact that this rate rise will have on his constituency. He understands the grave pressure it will have, and he is desperately flailing around every way he can to ensure that the impact of this interest rate goes unnoticed in his electorate. Well, there is no hope. And I am sure all the schoolkids who are watching around us know that it is extremely rude to point. I am sure all of them up there are witnessing and know that that is extremely bad behaviour and that the animated instance from the Chief Government Whip tells how desperate this government is.

Today’s interest rate rise shows the Howard government’s claims that they are sound economic managers to be complete nonsense. This has been the Howard government’s No. 1 claim to fame over the last 11 years, and they have not delivered on it. It is the ninth straight interest rate rise since 2002 and the fifth interest rate rise since the last election, when the Prime Minister promised to keep interest rates low.

Remember this 2004 election campaign promise by the Prime Minister: ‘Who do you trust to keep interest rates low?’ Well, the people who trusted him at the last election know that they invested their trust in the wrong individual. There have been five interest rate rises since the last election. In fact, the cash rate is now at its highest level in more than a decade. For those who follow this issue, that is the interesting number to watch. It will add about $50 a month to an average monthly mortgage repayment of $250,000. That is $50 a month that many families just will not have, because they are already in massive debt.

This rate rise is very bad news for working families. Many families are highly geared with huge mortgages or rent payments and credit card debt. Indeed, we have some of the highest debt we have ever seen in this country. Families are struggling to meet their financial commitments as well as coping with the increasing costs of groceries, petrol, health care, child care and education. But what was the Howard government’s reaction to today’s rate rise announcement? The Treasurer said that the official cash rate of 6.5 per cent is lower than it was when this government was elected. That is a great claim to fame!

There was no acknowledgement of the suffering that this will cause many working families. That is because the Howard government is completely out of touch with most of the community. Indeed, the Prime Minister and the Treasurer believe that interest rates are low. They do not understand that increased levels of debt mean that each interest rate rise packs a punch to the family budget. Indeed, Peter Costello said, back in 2005, ‘If you see a single digit in front of your interest rates, that is low.’ Tell that to the working families out there who are now struggling to find that $50 extra.

In my electorate of Chisholm, 25.6 per cent of families are suffering mortgage stress, meaning they are spending more than 30 per cent of their household income on mortgage repayments. But those who are renting are also suffering. The Age reported on 25 July this year that 39.6 per cent of Chisholm households are suffering from rent stress, meaning they are spending more than 30 per cent of their income on rental payments. I do not know how you manage to feed your family when 30 per cent goes on rent.

The Prime Minister claims that Australian working families have never been better off, but these figures show how out of touch he and his Treasurer really are. Many people just cannot get into the housing market in Chisholm. In the 12 months to July 2007, the median house price in Oakleigh was $478,750. At the other end of my electorate of Chisholm, the median house price in Box Hill in the 12 months to July 2007 was $483,000. Essentially, what that means is that first home buyers—young families—are no longer able to afford a house in my electorate. They certainly cannot find $483,000 to buy their first home.

On top of this, there has been an alarming rise in the rate of insolvencies across Australia. Many households are very heavily geared. Households are now carrying three times more debt, so interest rates have three times more impact on household budgets. Today’s rate rise will do nothing to help people in Chisholm suffering mortgage and rent stress, or those trying to get into the housing market. People in Chisholm can quite rightly feel they have been lied to by this government because it has not delivered on the interest rate promise it made at the last election.

The Howard government’s economic policies have failed to put maximum downward pressure on inflation and interest rates. We do not hear the Treasurer say anymore that he has slayed the inflation dragon, do we? The government have been asleep at the economic wheel for the last 11 years. In times of great growth they have done nothing. They have allowed these rate rises to happen.

The problem with this government is that they have been so busy crowing about how they have cut back spending and government debt that they have forgotten to invest in the infrastructure and resources that are essential to expand our productive capacity and take the pressure off inflation. (Time expired)

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