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Bannon's embarrassment highlights Hawke government failures



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Leader of tty: Opposition ' ·. ' ' . .

N E W S R E L E A S E BY J O H N H O W A R D M P L 6 5 / 8 5

. B A N N O N ' S E M B A R R A S S M E N T H I G H L I G H T S H A W K E G O V E R N M E N T F A I L U R E S

T h e S o u t h A u s t r a l i a n P r e m i e r , M r B a n n o n , is c l e a r l y e m b a r r a s s e d at th e p r o s p e c t o f t h e P r i m e M i n i s t e r t a k i n g p a r t in the S o u t h A u s t r a l i a n e l e c t i o n c a m p a i g n .

M r B a n n o n ' s e m b a r r a s s m e n t is u n d e r s t a n d a b l e .

M r H a w k e ' s p r e s e n c e w o u l d u n d o u b t e d l y r e m i n d S o u t h A u s t r a l i a n s o f o u r r e c o r d r e a l i n t e r e s t r a t e s - o ne o f the l e g a c i e s o f th e P r i c e s a n d I n c o m e s A c c o r d .

U n d e r t h e H a w k e G o v e r n m e n t A u s t r a l i a h a s th e h i g h e s t i n t e r e s t r a t e s ( a f t e r i n f l a t i o n is t a k e n i n t o a c c o u n t ) s i n c e t h e G r e a t D e p r e s s i o n o f t he 1 9 3 0 s .

T h e s e i n t e r e s t . rate r i s e s h a v e h i t v e r y h a r d at o r d i n a r y A u s t r a l i a n s - w h e t h e r c i t y d w e l l e r s or f a r m e r s , w o r k e r s or b u s i n e s s m e n .

H o m e b u y e r s a re p a y i n g h e a v i l y f o r t h e h i g h i n t e r e s t r a t e p o l i c i e s o f the H a w k e G o v e r n m e n t . ■

A p e r s o n b o r r o w i n g $ 5 0 , 0 0 0 f r o m a b a n k in M a r c h 1985, sa y o v e r 25 y e a r s at 11.5 p e r c e n t i n t e r e s t , w o u l d h a v e b e e n p a y i n g o u t $508 a m o n t h in r e p a y m e n t s .

T o d a y , w i t h i n t e r e s t r a t e s h a v i n g r i s e n to 13 . 5 p e r c e n t , t h a t h o m e b u y e r w i l l be p a y i n g a p p r o x i m a t e l y $ 5 8 3 a m o n t h - $75 a m o n t h m o r e .

H o w e v e r , s o m e o n e w i s h i n g to b o r r o w $ 5 0 , 0 0 0 f r o m a s a v i n g s b a n k n o w m i g h t be o f f e r e d o n l y $ 3 0 , 0 0 0 at h o m e l o a n rates,

't o p p e d up' w i t h $ 2 0 , 0 0 0 at a t r a d i n g b a n k (at 1 7 . 5 p e r c e n t i n t e r e s t o v e r 10 y e a r s ) .

T h i s p e r s o n w o u l d h a v e to r e p a y $ 7 0 4 a m o n t h - $ 1 9 6 a m o n t h o r n e a r l y 40 p e r c e n t m o r e t h a n t h e p e r s o n w h o t o o k o u t t h e l o a n in M a r c h 1985. T h e a v e r a g e i n t e r e s t r a t e o f t h i s " c o c k t a i l " l o a n w o u l d b e a b o u t 16 . 5 p e r c e n t - w e l l a b o v e t h e 13 . 5 p e r c e n t c e i l i n g .

L i t t l e w o n d e r t h a t M r B a n n o n d o e s n o t w a n t M r H a w k e - w h o p r o m i s e d th a t i n t e r e s t r a t e s w o u l d fa l l in 1 9 8 5 - in S o u t h A u s t r a l i a o v e r t he n e x t f o u r w e e k s .

T h e P r i m e M i n i s t e r ' s p r e s e n c e w o u l d a l s o r e m i n d e m p l o y e e s o f t h e m o t o r i n d u s t r y in S o u t h A u s t r a l i a of t he d a m a g i n g i m p a c t o n t h a t i n d u s t r y of t h e H a w k e G o v e r n m e n t ' s p r o p o s e d f r i n g e b e n e f i t s t a x .

Parliament House, Canberra, A.C.T. 2600 Phone 726994 . · / 2

2 .

Mr Bannon therefore has good reason to want Mr Hawke as far away as possible from South Australia during the election campaign.

However, Mr Bannon cannot himself escape the odium of the high tax high interest rate policies of the Hawke Government.

As Premier of South Australia he has faithfully and consistently supported the Prices and Incomes Accord which has not only contributed to high interest rates but has been a major factor in the current abysmal weakness of the Australian dollar.

Therefore, in the coming campaign South Australians are entitled to know Mr Bannon1s views not only on interest rates but also the"colossal rise in our national debt in recent years whereby our total debt

to foreigners represents $4,500 for every man, woman and child in Australia.

CANBERRA 11 November 1985