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Wednesday, 25 February 1987
Page: 615


Senator COLLARD (Leader of the National Party of Australia)(4.28) —It gives me great pleasure to stand here today and support my colleagues Senator Archer and Senator Jessop on this matter of urgency:

The need of the Hawke Government to reverse its high interest rate and high taxation policies which are having such a disastrous impact on home owners and prospective home owners throughout Australia.

We have just heard Senator Childs talk about everything else but that. I do not blame him for doing that, because he has no answer to the basic assumption in that matter of urgency. He asked: `What would you do? What are your policies?'. We are not the government; we are not even a government in exile. We are the Opposition and we are fully conversant with the tremendous damage that has been done to the economy of this nation by the Hawke Government in four terrible long years. When we get that tremendous damage down to a basic level, we see what it has done to the ordinary men and women in Australia. One of the basic aspects of it is vastly increased interest rates. I have some interesting quotations here. In an interview with John Laws on radio 2UE on 5 November 1984 the Prime Minister (Mr Hawke) said:

. . . because inflation is coming down and inflationary expectations are down, interest rates will come down too.

The Prime Minister, in addressing a business lunch in Adelaide on 20 November 1984, said:

At present, the outlook for interest rates is as bright as it has been for more than a decade.

I would hate to see what the interest rates would be now if they had not been looking so bright then. Again, in the address to the same business lunch, Mr Hawke said:

Australia and Australians will during 1985 reap the interest rate rewards that are flowing from the successful policies of the past 20 months.

My gosh; he is dead right. Are they not reaping the rewards of the past policies of this Labor Government? Mr Keating, on the P.M. program on 14 March 1985, said:

I still stand by the remark I made in the election campaign that I think there is an interest rate step fall ahead for Australia and its interest rate structure generally through 1985.

Mr Keating, we are still waiting! The Minister for Housing and Construction, Mr West, in the House of Representatives on 12 November 1985, said:

In the longer term, it is perfectly obvious that the benefits of the depreciation will flow through into the balance of payments, and when that situation does improve, as I expect it to do and as the Government expects it to do in time, the exchange rate will, of course, trend upwards and at that point of time interest rates will trend downwards, and that will be very good news for housing interest borrowers.

We are still waiting, Housing Minister West! We are still waiting for all these predictions to come true. As recently as 19 November last year, the Prime Minister said:

We will not interrupt that flow of forces which we believe, if allowed to operate, will mean that as we go through 1987, there will be a gradual lowering in the interest rate regime in this country.

How much longer have we to wait and put up with these predictions of good fortune just around the corner? While we are waiting, people are being forced out of houses, forced out of jobs, forced out of business and forced out of all those things that we have taken for granted in Australia for so long.

The fact about interest rates under the Hawke Labor Government is that, despite numerous promises to the contrary, they have continued to rise to all time record levels. During the December 1984 Federal election campaign the Prime Minister and other Ministers promised time and again that interest rates would fall. The truth about what has happened to interest rates between November 1984 and February 1987 is as follows-and very sorry reading it is. The rate on savings bank home loans-pegged by this Government-went from 11.5 per cent to 15.5 per cent. It is a similar story with Bankcard. So many people are quite aware of the rise in interest rates on Bankcard as the bills are now coming in for those Christmas presents and the provisions that they bought during the Christmas period. People are now getting those Bankcard bills and seeing what the interest rate really is. In November 1984 it was 18 per cent and in February 1987 it is 22 per cent. Who would have thought, when this Government took over, that such things could happen to the ordinary men and women of Australia? In November 1984 the prime rate for big business was 13.5 per cent and it is now 18.25 per cent. It is no wonder we are seeing a lack of investment in business and manufacturing in Australia. The overdraft rate for small businesses and farmers was 14.5 per cent in November 1984 and is 20.5 per cent now.

It is interesting that on Tuesday 24 February 1987 the Sydney Morning Herald headlined its front page with the statement that the National Australia Bank will lift its home loan interest rate to 16 per cent, even if the Government continues its current subsidy to the banks, which is aimed at keeping the rate at 15.5 per cent. In other words, savings bank home loan interest rates are set to take off again. Yet, as recently as Tuesday 17 February this year, the Prime Minister was once again predicting interest rate falls. He told Parliament:

We look to 1987 with a cautious optimism about the economy including a fall in interest rates in 1987.

How can this Government even think that it has any credibility left in the minds of the people of Australia? In this short period of sittings-two weeks-we have seen a current account deficit of $1.2 billion announced for January. Our total foreign debt has been announced at $100 billion, which represents over $6,000 for every man, woman and child in Australia. To put it in another way, every baby that is born today is born with a debt of $6,000 around its neck because of the profligacy and the bad economic management of this Government. Government senators often look across at us and call us a lame duck Opposition. Well, after reading the polls today, these lame ducks are flying higher, faster and more confidently than the Hawkes of this world.


Senator Button —That is a very good analogy.


Senator COLLARD —If Senator Button wants me to go further with an analogy, this Government is an albatross around the necks of the people of Australia who elected it.

Housing is in crisis. As both my colleagues have said in their contributions to this debate, new approvals are down 17 per cent this financial year. Rental housing is stifled. Of course, this is very plainly because of this Government's policies. It was quite adequately explained by Senator Archer. We have had the abolition of negative gearing as a tax deduction, the imposition of a capital gains tax and, as if that were not bad enough, on top of that we have had State government legislation, particularly in the Labor States, which restricts the rights of the landlord to the benefit of the tenant. I for one am not advocating that we should go back to the Charles Dickens period as far as rental housing goes, but the rights of landlords have been restricted and all the rights have been given to the tenants. How many landlords must be saying: `Why bother? Why should we invest in rental housing? We can put our money somewhere else'.

As I have said in previous debates, this is a government of records-record taxation, record expenditure and a record low for the Australian dollar. The list is almost endless. We now have another record four years. In that four years this Government has demolished that great Australian institution-home ownership. This has been achieved by a combination of things-blind arrogance, misguided ideology and gutlessness to take hard decisions. It has been said-I think it might have been said by a Minister in the Whitlam Government-that every home owner is a little capitalist. If we bear that in mind, we could be forgiven for thinking that for ideological reasons alone this Hawke Government has set out deliberately to destroy home ownership. This is the thing that we have taken so much for granted-our own home. The thing for which we have worked, saved and denied ourselves has been denied us-our own home. When young couples get married, they both go out to work to save for their own home and put off having a family. Then they decide to have a family and they lose one income. Having bought their house, they then find that, because of this Government's policies, they are forced out of that home for which they scrimped and saved and denied themselves for so long. What a terrible indictment that is of this Government which seeks to represent the men and women of Australia.

We in the Opposition applauded the decision to float the Australian dollar. However, when we do that, we must recognise that we put ourselves in a position where the world economies can make a decision on our economic performance. That has been done. Those economists have cast judgment on us. Of course, the second point about that is that any government that floats its currency needs severe economic discipline. This Government has not done that. It has seen its expenditure blow out. It has not disciplined itself at all. As a result, we have seen taxes rise and Federal borrowing rise. To keep the Australian dollar above the value of the Mexican peso, to prevent our dollar really going through the floor, this Government has had to put up interest rates to attract money into this country. Of course, that overseas money has done nothing other than to show our current account deficit in a better light than it should have been. It has not created any new jobs, it has not created any new industries, but it has had a disastrous effect on the home owners of this nation. People in business and on farms, when they went into their original contracts, worked out with their accountants that they could do this or that and which repayments they could meet. But in a few short years, whether we talk about home owners, businessmen or farmers, they have found themselves in a position in which in their wildest dreams they could never have imagined themselves a few years ago-all because of this Government's policies.

Home owners with a $50,000 loan over 25 years have seen their home repayments increase by $152 since the last election when the people of Australia put this Government back into power. Much has been said of the pegged interest rates. That is right. This Government has made a great thing about it and Senator Childs mentioned it but, of course, immediately we pay interest rates to try to shore up our faltering position, we immediately cut off the money supply because people will not put money into the savings banks where the money would be available, so the money goes elsewhere. There has been a very big lack of money in savings bank accounts to provide for housing.

People have had to go to other places for home loans. We have seen tragedies of people even going to finance companies, and then really getting caught as the interest rates have gone up. We have seen repossessions unprecedented in Australia's history as people have sought money elsewhere, thought they could meet the repayments, as indeed they could at the time but because of what has happened since they have been forced out of their houses.

The other part of the equation is the costs. We have the accord. On many occasions I have said that the accord has its good points. It stopped the excesses of some of the more outrageous unions, but it has also meant that despite productivity and the ability of the community to pay, wage rises have gone on and costs have gone up. On top of that we have the superannuation claim, which is estimated to increase the cost of a house by $1,500 and so it goes on. The deplorable economic record of mismanagement and of profligacy-whatever adjectives one likes to think of-this Government has forced people out of rental accommodation. It has forced people already in houses out of them and it has forced people who thought they could buy a house to think again and put it off. It is getting increasingly difficult for people to own what we once considered a great Australian institution, their own home, and all because of the disastrous, inept policies of this Hawke Labor Government.