Interest Rates and Housing Affordability 
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| Tuesday, 13 November 2007 | ||||||
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Mr MIKE BAIRD (Manly) [4.02 p.m.]: I move:
this House congratulates the Commonwealth Government for 11 years of outstanding economic growth and condemns the New South Wales Government for failing working families. The late 1980s, when I started my career, was a fantastic time, but under Prime Minister Paul Keating interest rates increased to 17 per cent. In that economic environment, rather than being left to aspire to career advancement, I was quickly moved to the insolvency area, which, not surprisingly, was the pinnacle of the bank's activities at that time. Every day we read the newspapers, and the insolvency companies were always on the front pages of all of them—not only on the back pages or in the Australian Financial Review. The insolvency companies moved in and the media reported what they were doing. Mums and dads who had to deal with 17 per cent interest rates were going nuts: they were being put out of their houses everywhere. Prime Minister Paul Keating came up with his so-called J-curve, a fantastic concept that I am sure Government members remember well. But the great Paul Keating J-curve and his economic miracle never appeared! It was an end curve. I do not know what curve Wayne Swan will use but Labor's approach to economics is that when everything gets too hard and is well beyond them they say, "We have to have a recession. That is the only way out. We have run out of ideas. We have no idea what to do. Everyone tells us we are in trouble." So what do they do? They have a recession. Hallelujah! We well remember 1991 as a time of Labor's unbelievably fantastic economics. Kevin Rudd has said, "I am not going to make any statements on interest rates." Why is he not going to make any statements on interest rates? I will tell you why, and it is very simple: Kevin Rudd does not understand interest rates. He does not know what drives interest rates or how they work. Wayne Swan was asked the question five or six times, "Will interest rates go up under you?" and he could not say yes or no. Do you want to know why? He could not say yes or no, because he does not know. This is a really big question that the people of Australia want answered. Do they want Kevin Rudd and Wayne Swan, who have no idea what drives interest rates, to manage the economy? We all know that the Labor solution to economic problems is to have a recession. That is what we are hearing from Kevin Rudd and Wayne Swan. If a miracle happens and they get into power, which would be a travesty of justice for every person and working family in this nation, what experience will they rely on when they sit at the Cabinet table? When there is pressure on interest rates they will have to ask themselves, "How do we deal with interest rates?" Will they turn to Anthony Albanese and say, "Anthony, just give us the benefit of your background, skills and experience and tell us how to deal with interest rates"? Let us look at the facts of the Coalition Government under John Howard and Peter Costello and the Labor Government under Bob Hawke and Paul Keating. Under Bob Hawke and Paul Keating the average interest rate was 12.75 per cent, whereas with the Coalition it has been 7.25 per cent! That is a difference of 5.5 per cent, which is not insignificant. We heard the member for Penrith go on about interest rate rises. If Australians are listening—and I hope they are—they will realise that an extra 5.5 per cent on the average $400,000 Sydney mortgage is where Kevin Rudd and Wayne Swan are taking us. Kevin Rudd and Wayne Swan are just as unbelievable on real wages. Wage increases plus productivity equals real wages is a fairly basic formula. Under the Coalition real wages have increased by 21.5 per cent. What happened under Bob Hawke and Paul Keating I am not sure— [Interruption] Mr Barry Collier: No, you are not sure. You have no idea. Mr MIKE BAIRD: There was a recession. I can tell the member for Miranda exactly, if he would like to know. During the entire 13-year Labor term real wages actually fell 1.8 per cent, versus a 21.5 per cent increase under the Coalition. Under the Labor Government people paid 5.5 per cent more on mortgages and received 24 per cent less in real wages. That is where we will be heading if a Labor government comes into power. I do not need to go into the facts about unemployment figures, but we have had record unemployment figures, 33-year lows, under the John Howard-Peter Costello Government. Mr Barry Collier: Talk about the Phillips curve while you are at it. Mr MIKE BAIRD: I remember the Phillips curve. Where was unemployment under Labor? In 1992 the figure was 10.9 per cent, and more than 900,000 Australians were unemployed at the peak. That is where we are heading again. I emphasise these facts to make it very clear. The Australian economy has just completed its sixteenth year of economic expansion and we have ongoing budget surpluses. There is no net debt. That means the Australian Government is not placing upward pressure on interest rates. Under Labor we had a recession. Mr David Harris: The sixteenth year? That means the growth started before the Coalition. The first five years were Keating. Mr MIKE BAIRD: No, I will pull the figures out and finish that off in terms of inflation. Net debt was eliminated; $96 billion in Labor debt was eliminated. We are all aware of the risk that Kevin Rudd and Wayne Swan present to this country. Of that $96 billion debt, Labor racked up $65 billion in its last four years in office. The Iemma Government is on a debt splurge. As has been said before in this House, when a government runs out of ideas and does not deliver services, it raises debt. We have two concerns. We are concerned for the people of Australia as they face a Rudd-Swan government and we are even more concerned that this outrageous Iemma Government is mismanaging the State. Bad, old Labor economic policies are about to come to fruition in this State as the debt continues to rise. The question is: What is the State Labor Government doing? Average mortgage payments in Sydney are 40 per cent higher than the national median, yet incomes are only 12 per cent higher. This State should regulate mortgage brokers. For four years we have waited for regulation of mortgage brokers. They have easy access to credit. People across Sydney have access to that easy credit, and it is the State Government's fault. It is not addressing the scourge of the mortgage industry: the unscrupulous mortgage brokers. They act solely on commission and push up mortgage payments. The State Government has responsibility to do something about that. The Iemma Government should hang its head in shame at the management of the State. John Howard has done an outstanding job. Add to:          Write Comment
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