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Wednesday, 3 December 2003
Page: 23642

Mr HARTSUYKER (4:07 PM) —It is always a revelation when we hear the acting shadow Treasurer, the member for Fraser, raising the issue of interest rates. I would say that the credibility of the member for Fraser in the area of interest rates is probably very similar to the credibility of Henry Kaye in the area of property investment. In fact, the opening premise in this matter of public importance is incorrect. I will quote it. It says:

The impact on families of the Government's decision to raise interest rates ...

The member for Fraser has got it wrong again. It is in fact the Reserve Bank's decision—the decision of an independent body—to raise interest rates, not a decision of the government. The member for Fraser was speaking about how the government should be controlling the property market, either through some means other than interest rates or by perhaps having pressured the Reserve Bank to raise interest rates sooner. I wonder if he is actually raising the proposition of removing the deduction on negative gearing to take the steam out of the property market. That is an interesting proposition that has been put forward by the member for Werriwa. Investor debt is a major element in the property market at the moment and certainly the member for Fraser seems to be advocating that.

When it comes to the issue of families, one of the best things that governments can do for families is provide a strong and stable economic environment where families can prosper. This government has done a great deal for families. This government has provided over one million new jobs. This government has reduced unemployment from 10.9 per cent under Labor to 5.6 per cent. Creating jobs is a great way to assist families and achieve a stable society. This government has paid back $66 billion of Labor's $96 billion debt, so we can put that interest saving into providing services, such as health and education services, for the benefit of families. In fact, the level of government debt as a proportion of GDP is the lowest in 20 years.

This government has provided tax cuts, both through the new tax system and in the last budget. That has been a great move for families. This government has presided over a dramatic fall in interest rates. Even with the 0.25 per cent increase in interest rates announced by the Reserve Bank today, housing interest rates are in the order of 10 per cent lower than they were under the Labor Party at the peak of their rule, when the interest rate for families on the family home was 17 per cent. This reduction in interest rates has been achieved on the back of strong economic growth. It is a tremendous quinella to achieve not only low interest rates but also at the same time strong economic growth.

If we look at the position of families, I wonder whether they would invite the Labor Party back to the Treasury bench. If you have a look at a $190,000 mortgage, the current interest rate increase would cost the average family with a $190,000 mortgage around $40 a month. If I were to go back to the Labor Party regime of 17 per cent interest rates, it would be $1,600 a month extra. We do not want to go back to that. I do not know too many families out there that would invite Labor back to the Treasury bench on the promise of increasing their monthly mortgage repayments by some $1,600. Why has the government been able to keep interest rates low: because of sound economic management. This government runs consistent surpluses, compared with the endless Labor spending binge. Labor's excessive spending binges meant that the Labor Party were endlessly competing with families out there in the mortgage markets—they were borrowing the money that families needed to buy their own homes. Because they could not manage the Treasury or their government budgets, they pushed the interest rates up for families and for small business.

The member for Fraser was in fact part of the dream team of the early nineties, when they were spending like there was no tomorrow. How much was the deficit back in those days, when the member for Fraser was actually over here on the government side? Was it $10 billion? No, it was more than that—it was in the order of $15 billion. They were out there driving families out of their homes through high interest rates, crippling small businesses and driving them out of business. They were throwing countless Australians on the unemployment queue. They think that is a good policy for families, but I think not. It is not a good formula for a cohesive society. It is not a good formula for strong families.

The message that I think the average Australian would like to send to Labor is: `Keep your grubby hands out of our pockets and let us manage our own families with dignity. Let us provide for ourselves. Give us the opportunity to prosper and to achieve an improvement in wealth.' Another issue that has been raised in this debate is that, in fact, the level of net financial wealth of families is increasing. For each dollar of household debt, the average family has in the order of $2 in financial assets and $6 in total assets. The net wealth of households has been increasing at the rate of about 10 per cent per annum or about eight per cent in real terms. So it is a fairly good story and it is quite a good story for families.

Labor cannot help itself—it just spends and spends and taxes and taxes. I think the average family would be saying to Labor, `Keep your hands off the keys to the Treasury.' The member for Lilley, the shadow minister for family and community services, wants to spend an extra $1 billion on welfare. The member for Sydney wants to pour a lot more money into universities. She does not provide any details as to how that would be paid for, but she wants to pour a bit more into universities. She thinks that is not a bad idea. The shadow minister for education has a bit of a problem budgeting as well. She came up with a $218 million error in her calculations. So we have shadow ministers running around everywhere with spending proposals, all of them a bit different. But what is the moral to the story? It is that, if you get enough Labor shadows together, you get a black hole. That is exactly what the families of Australia do not want—they do not want another budget black hole. They do not want the government in there competing in the marketplace for finances and driving up interest rates, just like the Labor government did in the nineties. They do not want that to happen. They want good, solid government and they want the government to run a balanced budget. They want the government to continue to pay back debt. They want good, strong economic growth in a low interest rate environment.

What about the state Labor governments? What are they doing for young families? What they are doing is imposing an incredible burden on first home buyers through stamp duty. I have heard the members opposite bemoaning the plight of first home buyers, and we sympathise. Getting your own home is one of the greatest things that you can ever do. How are the state Labor governments contributing? They are contributing a huge stamp duty burden. Bob Carr is ripping off first home buyers—ripping off all home buyers—with a massive stamp duty take. But he is not content with the benefits he is getting out of stamp duty; he is also adding about 40 per cent in total in charges, stamp duty and levies on insurance policies. So the first home buyer not only has to pay a huge figure in stamp duty; he also has to pay a massive state government levy on his insurance premium. That is what Labor in government do to help families. They impose a huge stamp duty impediment and a huge cost on your insurance premiums.

This government has provided strong economic management, a low-interest rate environment and jobs. It has provided welcome relief for families after those hard years of Labor. In addition, the government has quite a range of policies that are specifically targeted to assist families. The government has allocated about $19 billion in assistance to families through the family tax benefit, parenting payments and maternity and immunisation allowances. The family tax benefit is estimated to be worth about $11.25 billion per annum, child-care benefit worth $1.59 billion, parenting payment worth $5.94 billion and the maternity and immunisation allowances worth $222 million. And then there is the baby bonus. The members opposite scoffed at the baby bonus. I think the member for Braddon said that their policy statement is going to remove it. The government has allocated $170 million for the baby bonus. Then there is the fairer tax system. As I said before, there are tax cuts for families—a great move.

This government is providing a range of initiatives for families. It believes the family is the cornerstone of our society and should be supported. The government has supported the family with targeted programs and strong economic management. The opposition provide a high-interest rate, high-cost, high-taxing scenario, which I do not think the Australian people are going to welcome, and they are certainly not going to be encouraged to give the opposition the keys to the treasury bench.

The DEPUTY SPEAKER (Hon. I.R. Causley)—Order! The discussion is now concluded.