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Monday, 29 November 2004
Page: 103

Senator FORSHAW (8:16 PM) —The coalition government was re-elected on 9 October. It now claims a mandate for a whole raft of legislative change, and I will come to one aspect of that claim a little later in my remarks. I think it is important to consider the basis upon which the campaign was run by the government, particularly with respect to the economy. The government's campaign was centred on the very simple claim that it had brought economic prosperity to all Australians. In particular, it claimed that it had achieved the lowest interest rates for many years. It claimed that interest rates would always be lower under a Liberal government than under a Labor government and it claimed that Australians had never had it so good when it came to economic matters. It was a simple claim and a simple message, and I have to acknowledge that it convinced a lot of Australians. It convinced a lot of Australians to vote for the Liberals because it was accompanied by a massive scare campaign suggesting that, under a Labor government, interest rates would rise, thereby threatening the financial security of Australian families. But what is the real economic record of this government?

Let us deal firstly with interest rates. Whilst interest rates in Australia are currently around 5.4 per cent, they are actually higher than the rates of our major trading partners and most of the First World countries. For instance, in the United States of America interest rates are currently 1.9 per cent. As I said, in Australia they are 5.4 per cent—almost three times higher than in the United States. In the United Kingdom interest rates are 4.9 per cent, still lower than the rates in Australia. It is important to also note that interest rates in Australia have consistently been higher under this government than interest rates in other countries. When you go back and examine the figures, you will see that that was not the case under previous Labor governments. Labor's interest rates were no worse and in many cases they were lower than rates in other countries.

Internationally, interest rates have been coming down over the past five years. For instance, in 1999 in the United Kingdom interest rates were 5.5 per cent. As I said earlier, they are now 4.9 per cent. In 1999 in the United States of America interest rates were 5.3 per cent. According to figures as at September this year they are now down to 1.9 per cent. There has been a substantial fall over that five-year period. In the European Union, in 1999 interest rates were 3.5 per cent. They are now down to 2.6 per cent. In the UK, the United States and the European Union, interest rates have fallen significantly since 1999.

What has happened in Australia? Interest rates have gone in the reverse direction; interest rates have increased. They increased from five per cent to 5.4 per cent over the same period. Internationally, interest rates have been going down. In this country, they have been going up. The claim was made by the government, as stated in the Governor-General's speech, that Australia has one of the strongest performing economies in the world, but it is clear that, on the question of interest rates, that is not the case. When it comes to interest rates we are doing worse than nearly all other comparable countries and our major trading partners. When it comes to issues such as home ownership and impacts upon families, interest rates of course are not the only story.

Let us look at housing prices. Let us look at what people have to pay or, more correctly, what they have to borrow in order to purchase a home. We have seen in recent years, certainly in my state of New South Wales and in Sydney in particular, massive increases in the price of housing. The price of houses in Sydney and in other parts of the country puts home ownership well out of reach of many young families. Today in New South Wales the average housing loan for a first home buyer is $263,000. Back in 1996, when this government came to office, the average housing loan was $116,800. Under this government, the average size of a housing loan in New South Wales has increased by over 125 per cent. Those are the average figures for New South Wales. When you look at what has happened in Sydney, you will see that the increase is clearly much higher.

Under this government there has also been a substantial increase in average monthly repayments on new home loans. Again I refer to figures from New South Wales. In March 1996 the average repayment on a new home loan was $1,140 per month. As at June this year, it had risen to $1,817 per month. The average monthly repayment on a new home loan has risen by almost 60 per cent under this government. A family today endeavouring to buy a new home has to pay almost 60 per cent more in housing loan repayments per month than it did in March 1996.

Probably the most important indicator is the proportion of family income that people are now spending on home loan repayments. Back in March 1996 the proportion of family income spent on a home loan repayment in New South Wales was 32.4 per cent. Today it is 38.4 per cent. So, in real terms, it is much more expensive to buy a home; it is much more expensive to pay off your home loan per month; and it will take more of your family income in proportionate terms to fund that loan than it did when this government came to office. Clearly, if people are spending more of their disposable income on paying off their mortgage, they have less available to cover the costs that are incurred in other areas, such as raising a family, food, clothing, health, education and so on.

This is reflected in what has happened with personal debt. Under this government there has been a huge explosion in personal debt. Credit card debt in this country is increasing month by month. We have been drawing attention to this for a number of years, but the government chooses to ignore it. At no stage during the election campaign did the government acknowledge that, whilst interest rates may have been at 5.4 per cent, credit card debt and credit card interest rates were at record levels. When this government came to office in 1996 credit card and charge card debt was around $6 billion. Today it is $27.7 billion. These are the Reserve Bank's figures. Australian families today owe $27.7 billion on their credit cards. Credit card debt has increased by almost five times since the government came to office. Almost 70 per cent of Australian householders have a credit card or a charge card account, and in many cases they have more than one account and have multiple card holders on each account. The average debt per account has risen from $1,601 in June 1996 to $5,260 in June this year.

I can remember when the use of credit cards first became widespread in the community, with the introduction of Bankcard and so on. Many people paid off their credit card debt before the expiry of the interest-free period. In fact, I recall the banks were concerned that they were not making any money on these credit cards. A lot of people were not having to pay interest because they were paying the debt off before the 30-day free period had expired. That is not the case today. The interest accrued on credit cards today is over $266 million. It is accruing at a rate of $9 million a day. Indeed, nearly every month for the past six years the government has set a record figure for the interest accrued on credit cards. The government boasted about its record on interest rates. The facts are that on each of these indicators its record is a very poor one. It has presided over increasing financial pressure on Australian families; it has presided over huge increases in debt, reflecting that pressure.

Another area of interest is what has happened with foreign debt. Again I recall many years ago when we were in government and apologists for the Liberal Party, such as Alan Jones, would rant and rave daily on talkback radio about what was happening to foreign debt: you had to look at how foreign debt was increasing.

Senator Sherry —The debt truck.

Senator FORSHAW —Yes, the debt truck and they argued that that was the reason the Labor government should be removed from office. I have to acknowledge that I listen to Alan Jones occasionally—I would rather not, but I do—and I cannot recall him having mentioned debt for a long, long time because, if he did mention it, he would have had to tell the true story of what has happened to foreign debt under this government. Gross foreign debt has increased from $275 billion to $654 billion since this government came to office. It has skyrocketed. Net foreign debt has increased from $193.8 billion in 1995-96 to $393.4 billion in 2003-04. Similarly, gross private sector debt has gone up from $174.2 billion when the government came to office in 1996 to $581.2 billion at the end of the 2003-04 financial year.

The most telling statistic is that foreign debt as a proportion of gross domestic product has risen from 38.6 per cent in 1995-96 to 48.5 per cent in 2003-04. That is a serious statistic. That is an incredible increase in foreign debt as a proportion of our gross domestic product. Is it any wonder that Australian families are concerned about an increase in interest rates? I think a lot of them are scared to death about interest rates because they know that even a small increase will lead to greater financial pressure and problems.

Another area touched on in the Governor-General's speech is this government's proposal to use its majority in the Senate after July next year to pass its industrial relations legislation. In particular, it intends to pursue its agenda to remove the right of employees in small business to seek redress against unfair dismissal. This, of course, is legislation that has been rejected time and again by the Senate. The government will have a majority after July next year and no doubt will seek to use its numbers to bludgeon that legislation through. This government has an obsession with unfair dismissal laws. It claims that they retard economic growth and productivity. That claim is spurious because at the same time the government claims that it presides over an economy that has record growth and productivity levels. You simply cannot have it both ways.

The government claims that the current unfair dismissal laws are an impediment to employment. Yet, as I have pointed out in a number of speeches in this chamber, over the past 15 years—the time in which the unfair dismissals laws have operated federally—there has been substantial growth in employment in small business. According to the ABS, between 1983-84 and 1999-2000—the latest figures I have available—the number of small businesses in this country grew by 73 per cent. In the same period, the number of people employed in small business in Australia grew by 62 per cent. Public sector employment has gone down. Large company employment has gone down as we have seen structural changes occur in this economy. Small business employment has skyrocketed.

Yet the government says that there is a crisis in small business employment because of unfair dismissal laws. This government wants to remove the unfair dismissal provisions for employees of small business. This is a proposal from a liberal party. It calls itself `liberal', supposedly harking back to the great liberal tradition of supporting the rights of individuals before the law and particularly against collectivism. Yet the legislation the government proposes to put through the parliament, once it has a majority in the Senate, will remove a fundamental right for a group of Australian workers. People employed by small business will lose their right to access unfair dismissal laws. This legislation will enshrine in law discrimination against those employees. That is a hypocritical betrayal of any notion of liberalism.

Rather than spend its time waiting until it gets a majority in the Senate next July to bludgeon through parliament this draconian, discriminatory legislation on unfair dismissals, I ask the government to focus on a real problem that affects workers and their families in this country today—the problems faced by former employees affected with asbestos related diseases from products of James Hardie. Instead of worrying about spurious claims about the impact of unfair dismissal laws on small business, the government should stand beside the victims groups, their families, the ACTU, Premier Carr and the New South Wales government and do something to help those people get their just compensation. This government should do something to stop companies like James Hardie from using corporate law devices to avoid their responsibilities.

This government should take up the recommendations and the findings of the Jackson inquiry in New South Wales and fix the problems in the Corporations Law that allow James Hardie to walk away from their obligations to workers and their families in this country. If it does that, it will actually do something to help workers and their families, rather than just wasting its time attacking a discrete group of workers employed in small business, who want only the right to seek legal redress when they are unfairly dismissed.