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

Previous Fragment    Next Fragment
Tuesday, 19 June 2001
Page: 27858

Mr BARTLETT (2:18 PM) —My question is addressed to the Treasurer. Would the Treasurer advise the House of the benefits of low interest rates for Australian families and businesses? Are there any threats to the current low interest rate environment?

Mr COSTELLO (Treasurer) —I thank the honourable member for Macquarie for his question. Low interest rates benefit Australian families. When this government was elected the home mortgage rate was 10½ per cent; today it is 6.8 per cent. For an Australian family on an average mortgage of $100,000 that is a saving of $300 a month. Australian families today are saving $300 a month compared with the rates they were paying the last time the Labor Party was in office. Let me take it further. The last time the Labor Party held the Melbourne seat of Aston, home mortgage interest rates were 17 per cent. The last time the Labor Party held the seat of Aston, a family on an average mortgage was paying $850 a month extra in interest on the average mortgage, and that is after-tax money. If you were on the top marginal income tax rate, you would have to have been earning $1,700 a month before tax to be in the same position as you currently are.

I am asked whether there are any threats to low interest rates. The main threat to low interest rates sits opposite at this table. The person who presided over interest rates of 17 per cent back in 1990 and back in 1996—

Mr Crean —Play the man.

Mr COSTELLO —No, this is not playing the man; this is stating facts. Unfortunately, facts undermine your man. That is his major problem. The last time he was in office he had interest rates at 10½ per cent. There was a seminar here in Parliament House on 6 June with Chris Murphy from Econtech.

Mr Crean —Chris Murphy—that's your favourite modeller.

Mr COSTELLO —Chris Murphy, who was retained by the Labor Treasurer of Tasmania to model for the Labor government in Tasmania and who was retained by Dr David Crean as his preferred modeller—yes, that Chris Murphy.

Mr SPEAKER —The Deputy Leader of the Opposition is defying the chair.

Mr COSTELLO —He was doing a seminar here on 6 June and he was asked a question about roll-back—whether he had done any modelling on roll-back. He said this: `If roll-back amounted to $4 billion'—and I cannot imagine—

Mr Crean —The $4 billion tax credits of Tony Abbott.

Mr SPEAKER —The Deputy Leader of the Opposition is warned.

Mr SPEAKER —The Deputy Leader of the Opposition will excuse himself from the House under the provisions of standing order 304A.

The member for Hotham then left the chamber.

Mr McMullan —On a point of order, Mr Speaker: we do not challenge your right to exercise 304A in the way you choose, but we genuinely request that you apply it in an even-handed manner.

Mr SPEAKER —The Manager of Opposition Business runs the very real risk of reflecting on the chair. As any independent observer would have noted, I had in fact been very tolerant of the Deputy Leader of the Opposition. However, having warned him, he then retorted to the chair, which, as you know, under any standard is unacceptable.

Mr McMullan —I make it clear that I did not intend to reflect on the chair—

Mr SPEAKER —I thank the Manager of Opposition Business.

Mr McMullan —but I do intend to make it clear that we thought you were also very tolerant of a lot of other people.

Mr SPEAKER —The Manager of Opposition Business may be sure that the standing orders will be applied even-handedly, as they always are by all occupiers of the chair.

Mr COSTELLO —I was coming to some modelling which has been done by Chris Murphy from Econtech. He was asked a question about whether he had modelled roll-back. He had modelled $4 billion—and we cannot imagine that the roll-back would be only $4 billion, not after five years of opposing GST—and the effect it would have. This is what he said:

If roll-back amounted to $4 billion of stimulus, it would put the budget well into deficit, it would add up to 100 basis points to interest rates and would send the current account deficit back up.

Now, $4 billion of roll-back equals one per cent on your mortgage. The people of Aston ought to know this: if roll-back is $4 billion, that is another $80 a month; if roll-back is $8 billion, that is $160 a month, and start counting from then. Roll-back is a policy to roll up home mortgage interest rates. The Labor Party did it before; they will do it again. When you hear `roll-back', it means home mortgage interest rates go up and every family in Australia would be penalised under a policy of roll-back. No wonder the Leader of the Opposition will not come clean on it. No wonder he will not tell the people of Australia what he has in mind for them. It all ends in the same place—higher interest rates and more pressure on the families of Australia.