Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Congratulations, Mr President. My question is to the Minister representing the Prime Minister, Senator Evans. Will the minister please update the Senate on recent movements in interest rates and the importance of maintaining a strong surplus?

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

I thank Senator Collins for her question. Australian families have had to endure a succession of interest rate rises in recent years—10 official interest rate rises in a row under the previous government, which added almost $400 to the monthly mortgage bill of an average new mortgage. Whatever happens tomorrow in terms of the RBA’s meeting, we do understand that families are still doing it tough in the face of high interest rates and high living costs. It is the reason why we need to continue to make room for the Reserve Bank to provide interest rate relief by maintaining a strong surplus and investing in our nation’s productive capacity. It is why this government delivered a $55 billion Working Families Package, putting real tax cuts into families on low and middle incomes through the budget. It is why we have acted decisively to put more competitive pressure on the banks through our bank switching package so that families can more easily vote with their feet if they feel they are not getting a fair deal from the banks. If the official rate does come down tomorrow, it is important that all banks pass it on so that families get the relief they deserve. Any bank that fails to pass on an official rate cut will stand in stark contrast against those who, I am glad to say, have already undertaken to do so.

This government is focused on its long-term plans for the economy, such as putting downward pressure on inflation and interest rates. We will not be deterred by the short-term politics practised by the opposition. I was pleased to note that Wizard Home Loans yesterday announced it would cut its variable home loan rate by 25 basis points. We hope that is the policy pursued by all other lending institutions if there is a movement in interest rates.

At a time of global economic uncertainty, we need a strong surplus. It provides a buffer against global turmoil, it ensures the Reserve Bank has the room to move on interest rates and it is critical to financial nation building investments for the future. That is why this government stands by its $22 billion budget surplus. It is vitally important. The opposition seek to oppose measures that will allow us to deliver that surplus. Australians understand that surplus is part of the responsible economic management that allows us to tackle inflation and high interest rates. I would urge the opposition to pass the budget to allow us the revenue measures that create the surplus, which in turn puts downward pressure on interest rates and inflation. Currently, the opposition—purely for opposition’s sake—want to defeat the measures that would deliver $6.2 billion for the budget. Every dollar they oppose is taken away from critical investments in our roads, our rail, our health system and our universities. That money is vital to the economic strategy. Instead, the opposition seek to defend people from a tax on luxury cars. They regard luxury car taxation as unreasonable. They also want to prevent fair taxation of big oil companies. They have not got their priorities right. This government is maintaining a large budget surplus to put pressure on interest rates and to put downward pressure on inflation to help Australian families. (Time expired)