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

I thank the honourable member for his question. Yesterday brought the first interest rate cut that Australian mortgage holders have had in nearly seven years. It has been a long time that they have had to wait for that. It was the first interest rate cut ever experienced by some 740,000 first home buyers. That, again, is an important fact to note. It has been a modest contribution to the cost-of-living pressures faced by working families, but for those 3.1 million Australian households with mortgages it represents a welcome development. For the average mortgage holder that means a saving of nearly $600 a year.

Today, through the national accounts data, we have an indication and evidence of solid growth for the Australian economy for the June quarter. This is particularly solid growth when you consider the international context in which we are operating. The Treasurer has just referred here to the international comparators for the first six months of the year, whereby the economies of Japan, Germany, France, Italy and the United Kingdom have either experienced negative growth in those quarters or experienced zero growth. For developing countries also in the June quarter, I draw the House’s attention to the fact that Hong Kong experienced negative growth of 1.4 per cent and Singapore of 1.5 per cent.

I would draw to honourable members’ attention—I notice the Deputy Leader of the Opposition finds negative growth around the world amusing—that the recent outlook document produced by the OECD for the global economy again contains some disturbing findings about the period which lies ahead. The OECD has noted that global growth is weak and said:

Financial market turmoil, housing market downturns and high commodity prices continue to bear down on global growth …

And, furthermore:

Continued financial turmoil appears to reflect increasingly signs of weakness in the real economy, itself partly a product of lower credit supply and asset prices.

That is the interim assessment of the economic outlook for OECD countries dated 2 September, yesterday.

Therefore, against these global circumstances, as reinforced by that OECD bulletin, this quarterly growth figure for Australia represents solid growth. When you look at the fact that that translates into annual growth of 2.7 per cent, we believe that this represents a reasonable performance against the difficult challenges which now present themselves to the Australian economy internationally. The other thing I would say is that it also represents a solid performance for the economy domestically, given the cumulative impact of 10 interest rate rises in a row on the part of those opposite, all of which serves to have an impact on the cumulative economic wellbeing of the country.

I said yesterday, and I say again today, however, that the state of the overall economy and the fact that we have had one interest rate cut, representing modest help for working families under financial pressure, mean that we still have much, much more to do when it comes to assisting those Australians. But, to put it into context, yesterday’s official rate cut put nearly $600 a year back into the wallets of families on average mortgages right across Australia. I would ask those opposite to contemplate one thing they are about to do in the Senate—that is, their Senate treatment of the Medicare levy surcharge.

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