Michael Ronaldson (Victoria, Liberal Party) Share this | Hansard source

Absolutely. I said at the start that, had Senator Sherry indicated in 20 minutes one single policy that the Labor Party would introduce, we might have a different conversation. The fact that he, in his shadow ministerial position, in 20 minutes on his own motion, was not able to put forward one positive suggestion, one point of difference, means that we are required to return to the record of the Australian Labor Party—because the Australian people will quite rightly assume that, if the shadow minister does not have a positive contribution, Labor will repeat the sins of the past.

The rate rise will undoubtedly be passed on. It may well have started today; I do not know. Mortgage interest rates will rise to about 8.05 per cent. Under the Labor Party, in 13 years, mortgage rates were never lower than that. Never in 13 years did the Australian Labor Party get interest rates down to 8.05 per cent. In 1996, when the Australian Labor Party left office—fortunately—interest rates were 10.5 per cent. In Labor’s 13 years in office, home loan interest rates averaged 12.75 per cent. My notes say that, between 1989 and 1990, interest rates peaked at 17 per cent. If only they had been 17 per cent! I vividly remember buying my first house with my wife in 1983. At the peak, we were paying 18.25 per cent. In six years we did not pay a single dollar off our mortgage.

The small business community in my home town of Ballarat were utterly decimated because, as you would be well aware, Mr Acting Deputy President Ferguson, they were paying interest rates of 22 per cent, and if they were a bit shaky on it they were having another two per cent whacked on top of that—24, 25, 26 per cent! In the main street of Ballarat every second shop was closed. Unemployment was closer to 20 per cent than 15 per cent. Youth unemployment was at 45 per cent. They were diabolical days.

The reduction in mortgage interest rates since 1996, even after yesterday’s increase, would still save a typical family $449 per month in interest payments on an average $220,000 home loan. In September 1994, Kim Beazley was the Minister for Finance, home loan mortgage rates were 9.5 per cent, and this is what he had to say—and I will read through this slowly so that those opposite can take this in:

... I point out that this is still a very low interest rate regime—

this is 9.5 per cent—

in Australian historical standards. It is a regime that is capable of being held at that level largely because the fundamentals of the economy in this country are very good indeed.

So in 1994 a 9.5 per cent interest rate was considered low. The Leader of the Opposition, the Leader of the Australian Labor Party in 2006, said, in 1994, that mortgage rates of 9.5 per cent are low and that keeping them at that percentage was an achievement of the Labor Party. And yet for the last two days we have heard, from those opposite, doom and gloom about 8.05 per cent—a figure that, as I said before, no-one wants to see, a figure that was put forward by the Reserve Bank of Australia.

I am pleased that Senator Sherry—I think mistakenly, and I could see the look on his face after he had said it—talked about food prices. Senator Sherry knows as well as I do that increased food prices are a result of two things primarily: the drought and Cyclone Larry. Fruit prices rose 20.5 per cent in the September quarter. Banana prices rose by 45 per cent. I am not saying, and nor would I argue, that the inflation figure we had recently was all about bananas or about food. But I will passionately argue the case that they were a contributor.

Through the September quarter, the price of fuel rose by 10.5 per cent. Recent falls in world oil prices have started to impact on the price we are paying at the bowser. That, presumably, in due course, will be reflected in the inflation rate. And, indeed, if the petrol prices remain at the current level to the end of December, then fuel would take away about half a percentage point from the CPI growth in the December quarter. So we have got food, we have got cyclones, we have got drought and we have got fuel.

Underlying inflation has also been affected by 16 years of economic growth. And I think everyone acknowledges that. Access Economics’s recent Business Outlook said about inflation:

Underlying inflation is rising as demand catches up to the economy’s supply-side potential, which, in turn, is raising wages and the cost of materials. Headline inflation has risen even more, topped up by bananas and petrol prices. The momentum behind demand may keep underlying inflation flirting with 3% for a while, but its next big move is down. New supply is coming—more workers, factories, mines and roads. That will send underlying inflation back down through 2007 and 2008.

In the last 10 years, this government has worked very hard to strengthen the economy, to reduce unemployment, to increase real wages and to keep inflation and interest rates low. Under this government, real wages have increased by nearly 17 per cent. Under the Australian Labor Party, in 13 years they increased by 0.2 per cent. Again, because the Australian Labor Party are incapable of putting forward any alternative views on how the economy should be run, we are of necessity forced to go back to their record on what we could expect were they to be re-elected.

Under this government, inflation has averaged 2.6 per cent. Under the Australian Labor Party in their last term in government it was 5.2 per cent. In 1986, inflation was nine per cent. We talk about these figures in 2006—nearly 2007—in the context of a lack of understanding about the impact of nine per cent inflation, 17 or 18 per cent mortgage interest rates and 22 per cent small business loan rates. In 2006 we need to take in context what that would mean were that to be the situation now. And I can say to you that unemployment would not be at 4.6 per cent. Inflation would not have averaged 2.6 per cent. We would not have given our kids the opportunities they have had, of a good education, of good wages, the ability to put a roof over their heads, and the ability to have some security. The ability to go out and invest, to take a risk, to start a small business, would be gone. And this country survives, as you, Mr Acting Deputy President Ferguson, would be acutely aware, on the ability of the small business sector to survive and to employ.

The effect of the only policy that we have had from the Australian Labor Party, which is a return to a centralised union-dominated wages system, is that wage rises and booming parts of the economy would flow through to the rest of the economy, with a generalised wages blow-out on inflation and everything else. We cannot return to that.

In the quarter after Work Choices was introduced, jobs growth in this country was three times the average for that quarter over the last 20 years. The average for that quarter has been approximately 55,000 jobs. In the quarter after the introduction of Work Choices nearly 160,000 extra jobs were created. Were they created across the economy? Yes. Was there a heavy concentration in small business? Yes—because this government sent a very clear message to the small business community that we were going to give them the opportunity to invest with confidence and the opportunity to employ with confidence. In the short time that is allocated to me, let me say that the one thing that the Australian Labor Party does not understand is the relationship between small business and its employees. It is a relationship built on trust. (Time expired)