Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Tuesday, 17 March 1987
Page: 781

Senator COATES(4.28) —The Leader of the Opposition (Senator Chaney) will not be surprised to learn that the Government opposes this reference to the Senate Standing Committee on Finance and Government Operations. I believe that it would be a travesty of the parliamentary committee system if the matter had to be dealt with by that Committee, as Senator Chaney proposes. All the Opposition seems to want to do is to abuse the parliamentary committee system by engaging in what is simply a political point scoring exercise. It wants this reference as a vehicle for attacking a Minister and, I suppose, the Government as a whole. Perhaps one can understand that since the Liberal and National parties are in Opposition. I for one do not want to be part of such a farce which would bring the Committee into disrepute. It is not what we should use committees for; it is totally inappropriate.

The Committee should be allowed to get on with the real references that are before it, including those which were initiated by the Opposition. Let us not waste a lot of time today with an extensive debate, especially on top of the wasting of more than three hours on this matter on the last sitting day. The Senate's program is way behind as it is, and such a debate would only make it worse. The Opposition wants to deal in this debate with a matter that we effectively dealt with 2 1/2 weeks ago. I know that on that occasion we spoke to a motion for the suspension of Standing Orders. However, all the issues about which the Opposition is concerned were dealt with then.

Senator Haines —They were snuck in.

Senator COATES —Yes. People were pulled up occasionally, but I think that they felt they had dealt with them satisfactorily. If the Opposition wanted to have a debate in the Senate about housing interests rates or housing policy generally, why did it not raise a matter of public importance or move an urgency motion today? But no, being hopeless and bereft of ideas and policies, it uses this motion. This whole motion is nothing but a subterfuge. We certainly do not need an inquiry into interest rates. Apart from the fact that the Committee is already flat out dealing with existing references, the whole question of interest rates is a matter of opinion. Interest rates will ease and the easing of housing interest rates will follow. The only argument is exactly when that will happen. Of course, there is a range of views within the Indicative Planning Council and within government departments. As I said when this matter was debated last, members of the Opposition seemed to be suggesting that the Finance and Government Operations Committee hold an economic seminar so that it could receive opinions on interest rates from all the economists in the world. Those opinions, or the economists-whichever way one wants to do it-could be laid end to end.

Senator Haines —That would be ghastly.

Senator COATES —It is a ghastly thought. At the same time it is a waste of time. Senator Chaney raised the report of the Indicative Planning Council as some sort of triumph for the position that he took 2 1/2 weeks ago. Let me just quote all of paragraph 3.2 that he partly quoted himself. It states:

Prospects for interest rates over the forecast period are difficult to assess.

There is no argument about that. It continues:

A working assumption is nevertheless necessary.

That is a mere working assumption. It continues:

Over the longer run, the level of nominal domestic interest rates reflects mainly inflation and overseas interest rates. In the short-run, movements in interest rates can be associated with changes in sentiment in foreign exchange markets and changing demands on capital markets. Restraint in labour costs, a lowering of inflation and steady improvement in the balance of payments would provide circumstances in which market interest rates would fall. The potential for reduction has been enhanced by the foreshadowed May Economic Statement. At this stage, the outcome of the May statement and the subsequent Premiers' Conference are not known. In the interim-

this is an interim comment-

the Council believes that it would be inappropriate to assume that lower market yields will lead to a decline in mortgage rates much before the end of the forecast period.

That is the whole quotation. Honourable senators will note that the Indicative Planning Council refers to the inappropriateness of assuming that mortgage rates will decline much before the end of the forecast period. It does not say that there is no way that mortgage rates will fall before then. The implication is that it is quite possible that they will, but I cannot give a guarantee about that. To a large extent that is a matter of opinion. In fact, the Government's policies are meeting the conditions that the IPC has talked about. Last week there was a national wage case decision. Since depreciation has had its impact on the Australian economy the Government is forecasting that inflation will fall markedly. The latest statistics confirm that the current account deficit is trending down and the Government's fiscal policy remains firm. That stance will be reinforced by the May statement and the Premiers Conference.

Of course, we all want interest rates to come down-the Government and the community do and I guess we would even acknowledge that the Opposition does. The whole idea of the Government's policies and its strategy is to ensure that they come down as soon as they possibly can. I just emphasise that the Indicative Planning Council does not claim to make a forecast on interest rates. Its prime responsibility is to forecast numbers of commencements in the coming financial year. The question of interest rates is just one input into the equation into which it is trying to make a forecast. I point out that the Indicative Planning Council certainly contains people from Treasury and the Reserve Bank of Australia, but there are 15 other representatives including banks, building societies, unions, building industries, academics and other government departments, including the Department which provided the paper that so excited Senator Chaney on the last sitting day.

If the Senate wants to be reminded of this Government's housing achievements, I will do so briefly. Total funding for public housing by this Government in the current financial year is up 130 per cent compared to the Liberals' last year of office. This will lead to an increase of about 18,000 in the public rental housing stock. The first home owners scheme, which was first introduced by this Government in 1983, has resulted in 220,000 successful applicants. More than $1 billion has been committed Australia-wide under that scheme. When we gained office the housing industry was in bad shape. There had been only 105,000 commencements in 1982-83 and this increased to 152,000 commencements in 1984-85. Because of the fall off in demand, which we all know about, housing commencements decreased to 136,000 in 1985-86 and 122,000 commencements are predicted for the current year. It is still much more than members of the Opposition provided us with when they were in government. An upturn in that figure is predicted for 1987-88. It is perhaps not as great an upturn as we would have wished for, but it is an upturn nevertheless. There has been an increase of 70,000 in those employed in the housing and construction industry.

Labor's record on home lending is far and away better than that of the previous Government. We have had an average of 305,000 home loans per year under Labor compared to 245,000 per year in the last three years of conservative government, involving a figure of $21.1 billion for Labor over three years compared to $11.7 billion for the Liberals over the same period. I emphasise that the 13.5 per cent ceiling on existing home loans is being maintained for existing home owners.

I suggest that the Opposition's housing policy needs attention. Thankfully it will never be in a position to implement it. Let us examine what honourable senators opposite say they would like to do. They want to tear up the Commonwealth-State Housing Agreement-that is, end Commonwealth grants to the States for public housing and any Commonwealth involvement in nationwide housing development. They want to do this in the International Year of Shelter for the Homeless. The Opposition wants to forget about all those on the public housing waiting list and condemn them to remain forever either without proper shelter or subject to the excesses of the private rental market. I know that members of the Opposition say that general grants to the States will cover housing, but there is no suggestion in their policy that such grants would be increased by the equivalent amount or even at all. What a despicable policy that is. It reminds us, once again, of the way in which the conservatives have no care whatsoever for those in our community who are less well off. Yet they have the cheek to pursue this reference today. That is because their other concern is to stage political stunts. The motion to refer this matter to the Finance and Government Operations Committee should be rejected out of hand.