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Shadow Treasurer discusses housing affordability; mud-slinging; and opinion polls.

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WAYNE SWAN MP Federal Labor Shadow Treasurer



Interviewer: The great Australian dream of owning a home is slipping away for so many of you out there. New figures released by the ALP show the income needed to get into the market is far above average wages. Here’s a look at how it all shakes down, how much income you need to buy the average home in the major markets. In Brisbane it is at $92,000, in Sydney it’s $145,000, in Melbourne it’s $110,000 and in Adelaide it is $80,000. And just a quick look at the numbers for Perth now, $115,000.

And we're now joined by Shadow Treasurer Wayne Swan.

Good morning to you, Wayne.

SWAN: Good morning.

Interviewer: It’s very unaffordable for a lot of Australians?

SWAN: Yes, certainly for some people — six-figure salaries. It means they need two incomes and when you have two incomes it means the child care costs are up. I think what we’ve got to look at here is a variety of factors. We’re certainly going to look at recent interest rate rises. Australians are now paying the highest percentage of their income in mortgage interest repayments than ever before, even higher now under Mr Howard than under Mr Keating.

I think we've also got to acknowledge that the quality of housing has improved. People are currently living in better houses, but most importantly I think, we've got to stop the blame game and have a constructive debate about what solutions there are for the future otherwise our kids are going to be locked out of the housing market.

Interviewer: Are you saying you wouldn't have increased interest rates in the way that Mr Howard has?

SWAN: Mr Howard promised to keep interest rates at record lows. There's been four interest rate increases since then. What we have to do is make sure we have policy settings at the national level which put maximum downward pressure on inflation and interest rates. Also I think we just have to acknowledge there's no such thing as a cheap house anymore so there's no such thing as a small interest rate rise.

Interviewer: So if you were Treasurer or had been Treasurer, are you saying interest rates would not have increased?

SWAN: No, I’m not saying that at all. I’m saying we must do the most we possibly can to put downward pressure on interest rates through our national policy settings. We also need some national political leadership from the Federal

Government — acknowledge the problem, get together with the States, get together with the business community and put in place an affordable housing strategy. I mean, superannuation funds are coming to the party now with affordable housing funds. There's a willingness out there to work together to do something about the problem but we need some national leadership and we haven't been getting it from John Howard or Peter Costello.

Interviewer: The Real Estate Institute of Australia has suggested that First Home Owners’ Grants should be doubled. What are your thoughts on that?

SWAN: Well, that’s one possible solution. There are many. Mr Howard himself floated some ideas a couple of weeks ago which were then knocked back by Mr Costello. We need to put a range of solutions on the table and have a community debate about those.

Interviewer: If people are getting mortgages, even if they're given $14,000 instead of $7,000, they're still left with a massive mortgage to pay back. It's just the price of homes nowadays. The price of homes isn't going to get any less?

SWAN: No, it’s certainly not, and that's why we have to put maximum downward pressure on inflation and interest rates. We have to look at things like the First Home Owners’ Grant. We have to look at land release. We have to look at leadership from

the private sector. I don't think there's one major solution. We haven't got in place a national strategy to deal with the problem. That's what I'm calling for.

Interviewer: Well, you’re waking up to some news this morning, positive news for the ALP. One paper is calling it a “Ruddslide” at the next election. That's how favourable the figures are for you this morning. You don't have a smile though on your face this morning Wayne. What's going on?

SWAN: I think they’re pretty good figures, but it's very early days. People are out there, if you like, doing some window shopping. They're having a very good look at the ALP and they're interested in what they see but they haven't bought any tickets yet. I think what comes out of the poll here is a very clear message to John Howard — put down the mud bucket, pick up down the tool box and get back to work. I think people are pretty sick of the political tactics they’ve been seeing from Mr Howard and Mr Costello in the last couple of weeks and I think that’s the message in this poll.

Interviewer: Are you going to stop the mudslinging as well?

SWAN: Well, we haven’t been out there mudslinging. The Howard Government has been out there mudslinging, throwing a lot of mud at Kevin Rudd and others. We want to have a debate about policies like housing affordability, about how we set up the economy for post the resources boom. That’s what we want to talk about. We don't want to be out there talking about all this stuff that the Howard Government keeps dredging up about Kevin Rudd.

Interviewer: That’s a promise? We’ll wait and see.

SWAN: Right.