Page 237 - Week 03 - Tuesday, 30 May 1989
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interest rates depend on fixing up the economic mess caused by the Federal Government.
A $70 a week increase in repayments on an average home mortgage is almost four times as much as this Wednesday's expected tax cut of $18 a week, and almost three times the expected wage rise of $25 a week over the next two years.
April's REIA-MGICA survey confirmed that high interest rates were the major cause of the continuing deterioration in the housing affordability index to a record 40 per cent of gross annual family income compared with the 25 per cent maximum allowed by lending institutions. This means a family on average earnings cannot afford to borrow the money needed to buy an average home.
Those Australians, and those Canberrans, who are paying off home mortgages are now suffering severely and unfairly through increased mortgage payments or longer repayment times. Many will never pay off their mortgages and will go further and further into debt unless the Hawke Government cuts the huge interest rates, but that Government's policy is to keep interest rates high and to push them even higher, to try to fix up the mess it has made of the Australian economy, particularly after the April economic statement.
Mr Speaker, the Hawke Government has deliberately chosen high interest rates as its major economic policy weapon in dealing with our balance of payments and inflation crisis, and Mr Hawke has warned that interest rates will stay high and could go even higher until the economic crisis is resolved. I do not think we can really talk about ACT housing without looking at the disastrous effects that interest rates are having in our community.
The question is a very complex one. There are a number of things that we, as an assembly, can do. There are also a number of things that have to be done on a national level. The real answer lies not in interest rate ceilings or other simple solutions or cosmetic measures. As I said, I hope the Minister's review does not turn out to be cosmetic. One of the real solutions lies in getting the economy right, and that is very much a Federal responsibility as well as a territorial responsibility.
MR COLLAERY (3.35): The Residents Rally thanks Mr Duby for putting this matter on. It is an appropriate matter of public importance, and the Rally also notes the comments by the Minister responsible, including comments that Mr Ken Horsham, the current Commissioner, will be detailed to look at the housing policy review, with staff assigned to help him for that purpose. I regret to advise the Minister for Housing and Urban Services that the Rally is unable to volunteer any staff for that project.
A member: Why not?
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