Senate debates
Tuesday, 12 September 2006
Questions without Notice
Housing Affordability
2:23 pm
Ruth Webber (WA, Australian Labor Party) Share this | Link to this | Hansard source
My question is to Senator Minchin, the Minister representing the Treasurer. Does the minister recall telling the Senate in November 2005 that:
Certainly, there is still reasonably healthy growth in the number of first home owners, which remains above the long run average for the seventh consecutive month …
Is the minister aware that ABS figures actually show that the proportion of first homebuyers in the market has now been below the long-run average for more than four years? Is the minister further aware that last week’s Housing finance report showed that the proportion of first homebuyers in the market fell from 19.1 per cent to 16.7 per cent in the three months following the interest rate rise in May—the sharpest fall over a three-month period for more than four years? Does the minister expect the proportion of first homebuyers to fall even further following the latest interest rate hike in August?
Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source
I presume that is a question really about the level of interest rates, and we continue to assert very strongly, and will continue to assert very strongly, that the level of interest rates that is likely to prevail under a coalition government will always be lower than the level under a Labor government. The Australian people strongly supported that proposition at the last federal election, and it is not surprising, given that the Labor Party is the party that presided over a $96 billion build-up in debt and continuous government deficits. We are seeing that now with state Labor governments going into deficits, which put enormous pressure on interest rates because of the competition for funds.
It is Labor governments, and the former Labor government—and indeed in opposition—which so consistently advocate greater government spending. Whenever we have announced during our period in office any restraint in government spending, we have been roundly attacked by the Labor Party. After every budget we get attacked by the Labor Party for not having spent more than we are spending. They always propose to spend more money and therefore risk returning the government to a deficit position, therefore putting upward pressure on interest rates. The greatest threat to first homebuyers—and any homebuyer—in this country is the return of a Labor government—
George Campbell (NSW, Australian Labor Party) Share this | Link to this | Hansard source
That’s not what Ian Macfarlane said.
Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source
committed to reversing the reforms that we have made to the economy, tightening up the labour market, producing forces in the economy which will put upward pressure on inflation, returning the budget to deficit. With upward pressure on inflation you get upward pressure on interest rates. The Australian people learnt their lesson when they had 13 years of the Labor Party, with interest rates at unbelievable levels. If you were a first homebuyer under the Labor Party, you really knew what high interest rates were all about. There is no doubt that whatever the recent movement in interest rates—
George Campbell (NSW, Australian Labor Party) Share this | Link to this | Hansard source
Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source
The Reserve Bank governor has indicated in his statements that what is happening with interest rates is a return to a more normal level. Of course, the level of interest rates under us still remains substantially below the level of interest rates that prevailed under the Labor Party. The average rate of interest for mortgages under the Labor Party was some 12.75 per cent—
George Campbell (NSW, Australian Labor Party) Share this | Link to this | Hansard source
Paul Calvert (President) Share this | Link to this | Hansard source
Order! Senator George Campbell, shouting across the chamber is disorderly!
Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source
and it is in the range of seven per cent to eight per cent now, and that has been the average level of interest under us. So first homebuyers, whatever the current conditions, are certainly experiencing much better conditions, much more affordability than was ever the case under our opponents.
Ruth Webber (WA, Australian Labor Party) Share this | Link to this | Hansard source
Mr President, I ask a supplementary question. Is the minister aware that the number of families who own their own home outright has actually fallen by 150,000 during the term of the Howard government? Given the importance of home ownership for financial security in retirement, can the minister explain how this collapse in home ownership helps to address the financial implications of an ageing population, identified in the government’s own Intergenerational report? Why has the Howard government spent the last five years ignoring the housing affordability crisis in this country?
Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source
I would remind the senator that it was this government that introduced the First Home Owners Scheme, which has assisted over 865,000 Australians to purchase their first home since 1 July 2000, with almost $6.5 billion worth of grants being distributed to date. That is one of our schemes, which we introduced to help first homebuyers, and if she is concerned about affordability then she ought to talk to Labor state governments about their land release policies, their ridiculously high stamp duties and their outrageous tax burden on first homebuyers through their own state tax systems. Labor senators have it within their power to talk to their state counterparts about their outrageous policies on this issue.