Kevin Rudd (Griffith, Australian Labor Party, Leader of the Opposition) Share this | Link to this | Hansard source

My question is again to the Prime Minister. I refer to his answer to a previous question where he said that Australia’s interest rates were higher than those of many other economies because Australia’s economic growth record was stronger. Would the Prime Minister explain the basis for his answer when the 2006 OECD report lists Canada, the Czech Republic, Denmark, Finland, Greece, Hungary, Iceland, Ireland, Korea, Luxembourg, Mexico, Poland, the Slovak Republic, Spain, Sweden, Turkey and the United States as all having higher economic growth rates than Australia? Prime Minister, given this fact, how do you in fact justify the fact that Australia has the second highest interest rates in the developed world?

John Howard (Bennelong, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

In answer to the Leader of the Opposition, you cannot do a valid comparison in relation to that unless you also look at the length of economic growth and the length of the expansion. If you do that, you will find that Australia, of course, is in a much stronger position because we have had something like 15 years of uninterrupted economic growth. Can I just go back to what I said earlier, and that is that Australians are rather interested in relative performance in Australia because most Australians do not experience living conditions in other countries. The truth is that interest rates in this country are demonstrably lower now than they have been for a very long period. Under this government, the average level of interest is demonstrably lower than it was under the former government. No matter what statistics the Leader of the Opposition quotes, he cannot escape the fact that, when his party was last in government, not only the peaks in interest rates but also the average levels during the 13 years of the Hawke and Keating governments were much higher than they have been under this government. Nothing can alter that fact. He can hurl all the worldwide comparisons he likes.

We are very happy to have a debate about the relative standard of living in Australia compared with the relative standard of living in other countries. If the Leader of the Opposition wants to have a debate about relative per capita wealth, if he wants to have a debate about the provisions made for the less well-off in this country, if he wants to have a debate about the tax and payment support for people on average wages, we are very happy to do so. On all of those comparisons, this country is outperforming other nations around the world. I simply say to the Leader of the Opposition that nothing he can say by way of a question to me can alter the fact that interest rates today are demonstrably lower than they were when Labor was last in office. As a result, people have felt able to borrow a lot more and buy more expensive houses. As a result, they pay a higher percentage of their disposable income by way of mortgage repayments, but that higher debt burden is offset by the much more valuable assets they have, so their net financial position is a lot better than it was under the former government.