Mr BURKE (9:00 PM) —I rise tonight to talk about the impact of the interest rate rise in my part of Sydney, an impact which has been largely underestimated by various comments made by those responsible in the government. Make no mistake about it: the people of my part of Sydney, through most of Sydney and I daresay through most of Australia believe, and have every reason to believe, that they were promised a rise such as we have just had would not occur.

Mr Dutton —Rubbish.

Mr BURKE —I challenge the minister opposite, if he thinks it is rubbish, to send a direct mail to every one of his constituents saying, ‘I want to let you know we never promised interest rates wouldn’t go up.’

Mr Dutton —Happy to do that. Happy to tell them about 17 per cent under Labor as well.

The DEPUTY SPEAKER —Order!

Mr BURKE —That is what I would suggest the minister do. Part of the lack of understanding from the government—we just had the exact example there from the minister—is the failure to understand where interest rates are at relative to where debt levels are now at.

Mr Dutton —We know where they were at under you before.

The DEPUTY SPEAKER —The minister will desist from interjecting.

Mr BURKE —The issue is always going to be not what the rate figure is but the relationship of debt to income. With the radical growth in credit, the property boom and radical changes in property prices, what it now costs a young family to get into the housing market compared to what it cost before means that you do not get to the real fear level at 17 per cent; you get to it well before then. It will be at 8½ per cent that most of my friends will not own their homes anymore—well before any figures like 17 per cent. I do not imagine there will be many homeowners left at all with those sorts of figures. So the idea that those figures are a threat is the government wanting to say, ‘The entire economy would collapse and then the interest rates would continue going up.’

Every time the government talks about 17 per cent, it fails to acknowledge the danger to household income of 8½ per cent and the absolute financial strain and loss of property and loss of home ownership that people would face should interest rates get to nine per cent. What has happened to home ownership is something that I saw from the day that we got into our own mortgage. Within six months of moving to our part of Sydney, we were living in a home we could no longer afford to buy. I found a situation where friend after friend my own age was not able to purchase a home in the area where they grew up because property prices had gone to more than double what they could afford. They had found themselves moving out into areas of Western Sydney and south-west Sydney to get homes, then to find that the property prices there had similarly ballooned.

Add that to what has happened to credit card debt and compare interest rates of many years ago: not only are we now in a different international climate but, more importantly, we are in a different climate of household debt. Anyone who wants to claim a ministerial role in the government of Australia who does not understand the impact of household debt and how sensitive you can be to interest rates rises does not understand what goes on in the part of Sydney I come from. They do not understand what happens in south-western Sydney; they do not understand the area that is going to the by-election on Saturday; and, they do not understand what has also happened in parts of Melbourne or Brisbane. And you do not have to be in the major capital centres to find a radical rise in household debt.

We hear about average mortgages, but what is more important than that is average new mortgages. For young families trying to get into property and their own home ownership, it does not matter, when you average it out, what is happening to people in their late fifties who are at the very end of a loan. What matters to those young families is the new mortgage size. The average for new mortgages in Sydney is now $427,500 and a quarter of a per cent interest rate rise on that amount is $69 a month. So you can imagine how many young families are finding themselves—if they want to live anywhere near their extended family—on mortgages way in excess of that average. Then add to that what has happened to the other parts of household debt—(Time expired)