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Home owners slugged again as Government watches on.

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Senator Andrew Bartlett Leader of the Australian Democrats Housing Spokesperson December 3, 2003 MEDIA RELEASE 03/873

Home Owners Slugged Again as Government Watches On

Housing affordability will be made even more difficult for homeowners after today's interest rate rise, the Australian Democrats said today.

With a strengthening world economy and concerns about possible future inflation, the RBA increased the interest rate by a further one quarter of one percent.

“This will increase the monthly costs of new and existing mortgages and will further impact on the ability of first home owners to achieve home ownership,” Democrats’ Leader, Senator Andrew Bartlett, said.

“It may push some families over the edge. Paradoxically, it may assist investors who will be able to offset the costs of interest against their earned income under unfair negative gearing arrangements.

“The two recent rate rises are an indication of a lack of policy focus on housing and a reluctance by Government to tackle the real issues,” Senator Bartlett said.

“For too many years the Government sat back and watched with contentment while housing prices continued to rise.

“This is a failure of political courage by both Liberal and Labor. To fail to deal with the root causes of the housing boom means lots of Australians will directly feel the effects of this rate rise.

“There has been increasing evidence that house prices are well out of control and given that the Government is refusing to tackle the problem itself, it is only drastic action by the Reserve Bank that might bring them back into line.

“The Democrats again repeat our call for this Government to take action on housing and to develop a mid to long term housing plan.

“Only then will we be able to ensure that housing prices don't get out of control again if the Reserve Bank takes the brakes off in a few months time.”

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