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Monday, 29 May 1989
Page: 2886

Senator PATTERSON —I address my question to the Minister representing the Prime Minister. I refer to the devastating impact of record interest rates on Australian home buyers and the Treasurer's admission last week that at least part of the 1 July tax cuts will have to go towards helping to meet the extra burden. Taking one of the examples mentioned in the April economic statement, a wage earner on $26,000 a year and with a dependent spouse and two children, who has been promised tax and family assistance advantage of $41 a week, I ask whether the Minister is aware that if such a person has a $50,000 unregulated home loan over 25 years, his or her mortgage repayments have gone up, in less than a year, by about $34 a week, and in the case of a $75,000 mortgage-which is by no means excessive these days-the increase exceeds $50 a week. In other words, does the Minister agree that the crippling interest rates flowing from his Government's economic policy have, for hundreds of thousands of Australians, wiped out the benefits from the tax cuts before they have even been received?

Senator BUTTON —Even Senator Patterson's own figures do not establish that proposition; but of course the Government is aware of the impact of high interest rates on certain home owners. I have not done the figures to which Senator Patterson referred in her question; I am not in a position to either accept or dispute those figures. I accept them as having been put forward in good faith. The fact is that tax cuts given at any time are eroded in certain circumstances by inflation, or by mortgage repayments, or whatever. The tax cuts will, however, remain. It is the Government's hope that the high level of home loan mortgage rates will not remain.

Senator Alston —Is Hawke's statement still operative? Have we had a fall this year?

Senator BUTTON —I do not know about that. In answer to the honourable senator's question I will repeat what I have said on a number of occasions. The Government regrets the high level of home loan mortgage rates and the fact that they are a burden on a sector of the community. But, of course, the tax cuts are of universal benefit.