Helen Polley (Tasmania, Australian Labor Party) Share this | Hansard source

I do not intend to rewrite history or tell just part of the story of interest rates in this country or what John Howard did when he was Treasurer, but I am going to talk about the serious issue of housing affordability. Labor believes that all Australians have the right to secure affordable and appropriate housing. Housing affordability is now at critical levels for homeowners with mortgages and families who rent. Obviously, this is hurting working families and stretching their budgets to the limit.

Housing affordability has never been worse. Many Australians have given up on the dream of home ownership. The average Australian first home buyer now pays $2,300 per month to service a typical first home mortgage. They need a six-figure income just to meet their mortgage repayments. Rents are also increasing in many parts of Australia, making it harder to make ends meet and almost impossible to save a deposit for a home.

Dealing with the housing affordability crisis is a core challenge facing governments today. Labor believes that the federal government can take a more active role. The housing crisis needs national leadership—we need to end the blame game. Labor is committed to policies which make housing affordable by implementing economic policies designed to maintain low interest rates and a competitive housing finance sector; and secondly, policies which ensure that those on low and middle incomes can meet the cost of home ownership or rental or public housing arrangements.

A report by the Urban Development Institute of Australia released on Monday last week showed that only 39 per cent of average households can now afford to buy a house in their local area. Compare this to 96 per cent of households in 2001. This report is the most recent in a series issued by the housing industry, which is profoundly frustrated by the lack of interest and leadership by the Howard government on housing affordability. This is despite the fact that it is one of Australia’s biggest social problems.

The Commonwealth Bank-Housing Industry Association housing affordability index is at a record low, having fallen 40 per cent on Peter Costello’s watch. Households now need an income of $115,000 to keep up with mortgage repayments on the average loan for a median-priced home across our capital cities, up from $47,000 when Mr Costello became Treasurer. The average home now costs seven times the average annual wage, up from four times the annual average wage in 1996.

Data from the 2006 census paints an alarming picture of the number of households losing over 30 per cent of their income in rent payments. In my home state of Tasmania this equates to more than 11,000 households—or 38.2 per cent. Some of the Tasmanian electorates with the highest proportion of renters losing over 30 per cent of their income to rent payments include Bass, with 40 per cent of households that rent; Franklin, with 38.7 per cent; and Denison, with 38.6 per cent.

This is why I am so amazed that John Howard still believes that Australians have never been better off. Let me tell you this: the working families I have talked to in my home state disagree 100 per cent. They are hurting. If anything, this data shows just how out of touch the coalition is, especially with working families who are struggling with rising grocery prices, child care, petrol prices and, of course, interest rates.

In countless commercials in the last election, Mr Howard told you, the Australian people, that he could be trusted to keep interest rates at record lows. It was an irresponsible, undeliverable promise. In a press statement on the 16 July this year, Peter Costello claimed:

In order to keep housing affordable to young Australians we need to ... keep interest rates low.

What a joke! The fact of the matter is that there have now been nine rate rises on his watch, five of which have occurred since John Howard’s election promise in 2004 to keep rates at record lows. ‘Who do you trust?’ Remember that? Kevin Rudd’s plan for Australia is for the next 10 years, not for the next 10 weeks. Labor is committed to keeping the economy strong, but also to making sure our economy delivers for Australia’s working families. As I said at the outset, I am not rewriting history, but it is important that the community remember the 22 per cent interest rates that Australian families faced under John Howard when he was Treasurer. I remind people that this is the fifth interest rate rise since the 2004 election. This is hurting Australian families. There is also the uncertainty over industrial relations, the increased cost of child care, and the price of petrol and groceries continuing to escalate. (Time expired)

Question agreed to.