TIERNEY (Western Victoria) — My question is for the Treasurer. I ask him to
inform the house of the effects on Victoria’s working families of the 1 per cent
interest rate cut announced yesterday by the Reserve Bank of Australia.
LENDERS (Treasurer)— I thank Ms Tierney for her question.
Mr Drum interjected.
Mr LENDERS — Quite clearly Mr Drum does not care about working
families. He is more interested in scoring political points. I say to Ms Tierney that what this
means for working families in Victoria is, firstly, that for a Victorian on an
average mortgage with one of the four big banks it means costs of $121 per month
that will not need to be met in servicing their mortgage.
That is money that can either be reprioritised to meet pressing
family needs and working families’ budget issues or put into their home loan to
pay it out faster or to have equity that can be drawn down into the future. An
immediate effect of the Reserve Bank of Australia’s decision yesterday for an
average Victorian working family on a mortgage is $121 a month, and that is
We need to add that onto what has happened since June. Since 30
June the commonwealth government’s interest rate cuts have come into effect. We
are seeing pressure coming off working families with that assistance from
interest rates, and we have seen retail petrol prices declining by around 9 per
cent since June, so this interest rate cut, added onto the commonwealth tax cuts
and onto the petrol changes since June, has been of assistance. In Ms Tierney’s
electorate, the dollar having gone down, rural communities, particularly those
relying on commodity exports, will find that their product is more competitive.
In parts of Ms Tierney’s electorate where there are
manufacturing industries, particularly in the great city of Geelong and some of
the other rural areas, the Australian dollar’s depreciation will make
manufacturers more competitive internationally.
A range of things are happening, but there are good reasons to
be optimistic about the Victorian economy’s future. In this budget we planned
for a slowing down of economic growth, which I am sure Mr David Davis is aware of. We planned for slower growth rates
than were predicted, and there were various packages including the innovation
statement and the skills statement that were funded in the budget to assist the
Victorian community in those areas going forward. We also adjusted the rates of
payroll tax, land tax and WorkCover premiums specifically to assist business in
In conclusion, the world is facing difficult economic times.
What we are seeing in this state, though, is that compared to other states in
Australia we are better positioned; we are more cushioned for this. This
downturn is affecting working families across the state, but we have seen that
yesterday’s Reserve Bank of Australia decision, a single decision of our central
bank, reduces the mortgage for average families by $121 a month and introduces
liquidity into the banking sector, which will let banks lend more effectively,
assist businesses in their endeavours and create jobs into the future. We have
seen that happening. I welcome the intervention of the Reserve Bank of
We will see a direct flow-on for working Victorian families as
a result. These are important and difficult issues for the Reserve Bank. I
welcome its decision and look forward to the flow-through into the Victorian