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

I move:

That the Senate notes:

(a)

that the interest rate rise on 8 November 2006 is the eighth consecutive increase since May 2002 and the fourth since the 2004 election;

(b)

that the headline inflation rate increased to 3.9 per cent for the year ending September 2006;

(c)

that national and personal debt levels are increasing; and

(d)

the lowering of productivity and trending down in manufacturing and services export.

The motion I have placed before the Senate on behalf of the Australian Labor Party for consideration this afternoon focuses on a number of important economic issues: interest rate increases, the increase in inflation, increasing national and personal debt levels, and lower productivity and downtrends in manufacturing and service exports.

First I want to deal with some issues relating to interest rates. It is obviously an issue of considerable community concern at the present time, given the circumstances that many Australians find themselves in. We have seen some eight interest rate increases since May 2002—four of those increases, including the increase yesterday, since the last election. I remind those who are listening that at the last election the Prime Minister, Mr Howard, on behalf of the Liberal Party, promised—a number of commitments were made, but there were two that were critical to this debate—to keep inflation under control and to keep interest rates at record lows. This is from the Liberal Party website. I referred to it yesterday and noticed that those promises were still up there.

In recent times we have seen a considerable amount of debate as to the reasons for the eight increases in interest rates over the last five years. The recent increase is as a consequence of a significant increase in inflation. As the Reserve Bank remarked in its decision to increase interest rates, the headline rate of inflation, without referring to the specific figure, has now reached 3.9 per cent. If we examine this, the Liberal government can hardly continue to claim that it has kept inflation under control. It simply has not. One of the important reasons for the increase in interest rates is that the government has not kept inflation under control. As a matter of fact, inflation has increased significantly.

The government, of course, want to give all sorts of reasons for the increase in inflation. But the fact is they gave a commitment at the last election. Mr Howard, on behalf of the Liberal government, gave a commitment that they would keep inflation under control. They did not qualify it by saying, ‘Well, petrol prices may go up, food prices might go up or there might be a drought.’ They clearly made a promise to keep inflation under control. What has happened? Inflation has started to increase significantly. They also claimed that they would keep interest rates at record lows. How can interest rates be at record lows when we have had eight increases since May 2002?