SATURDAY, 13 JULY 2019
SUBJECTS: Australia’s weak economy and housing market data, Australia US relationship and state dinner, submarines, referendum on First Nation’s Constitutional recognition and a voice to Parliament.
JASON CLARE: What we're seeing at the moment is the real life impact of a weak economy. The Reserve Bank has had to cut interest rates twice over the last two months, now to emergency levels. Interest rates are lower today than they were during the depths of the Global Financial Crisis.
We're seeing in parts of Sydney and Melbourne people being forced to sell their homes today for less than what they bought it for a couple of years ago. You don't sell your home for less than you brought it for unless you absolutely have to. Unless you're in economic trouble. Unless you've got no other option but to sell your home. We know that there are a lot of people at the moment, who aren't getting enough hours of work, or their pay isn’t going up and they aren’t keeping up with the cost of living. They're being forced to sell their homes.
More people today than at any time since the Global Financial Crisis are behind in their mortgage repayments. So more people behind in their mortgage repayments today than at any time in the last 10 years. What we're really seeing here is the real life effect of the go slow economy, and the Government has to bear some responsibility for that. They're not taking sufficient action to make sure that our economy is growing strongly enough, and that wages are growing so that people can afford to pay their mortgage and keep their home, rather than being forced to sell it for less than they purchased it for a couple of years ago.
Just on the Prime Minister's impending visit to the United States. The Labor Party welcomes that. It's good to see that the Prime Minister is being invited and has accepted the invitation of the President to visit Washington. Australia and the United States are great friends and close allies. Have been for a long time, and will be into the future.
I'd encourage the Prime Minister to use the visit to urge the President of the United States to work as constructively as possible to end the trade war that we’re in the midst of right at the moment - the trade war between the United States and China. No one wins out of a trade war, certainly not Australia. We're a trading nation and we're affected by what's happening right now. America doesn't win out of it neither does China. The whole world is affected by a trade war between two economies that represent, between them almost half the world's economy. We are very keen to see that trade war end and to make sure that whatever deal is eventually done between the United States and China doesn't have any negative impacts for Australia. I'd urge the Prime Minister to use the relationship he's forging with the President of the United States to see that our interests are protected in any deal that's done between the United States and China.
JOURNALIST: On housing there have been reports that there is a bit more confidence back in the market, particularly in Sydney. We’re seeing much higher auction clearance rates than there were prior to the election and agents, and buyers, and sellers are reporting that they're getting stronger people turning out, with a bit more loosening of the purse strings, perhaps. There are signs of possible improvements aren’t there?
CLARE: I think what we're seeing there is the impact of interest rates being cut twice now, down to emergency levels. As well as changes to APRA lending standards that allow banks to lend more money to people than they might otherwise have been allowed to lend to. So people can to get access to finance, to loans at a cheaper rate than they have been in the past. So that's going to encourage people to take up loans.
I would say two things. One is it's important that the banks are responsible and they don't lend money to people who can't afford to repay it. Not just now but in the future when interest rates do go back up. And I'd urge all Australians that are thinking about taking out a mortgage to make sure that they don't get in over their head. I’ve seen it here in Bankstown in the past, where interest rates go up and then people can't afford to make repayments. The next thing you know the sheriff is knocking at their door and taking the keys to the home. It’s really important when you're looking at taking out a loan to be able to not just make the repayments today when interest rates are at rock bottom levels, but also in the future when they return to more normal levels.
JOURNALIST: That positivity seems to go against your claims that people are having to sell, that’s only a fairly small proportion of people in the market.
CLARE: We're seeing in some parts of Sydney and some parts of Melbourne, up to one in three homes sold, being sold at a lower price than it was previously sold. Here in Bankstown the data that the Sydney Morning Herald published earlier this week shows around about 12-13 per cent. Now it’s not good news when you're forced to sell your home for less than you purchased it for a couple of years ago. It risks negativity equity. It risks you finding yourself really in the lurch where you sell your house and you still have a mortgage to pay. No one wants to find themselves in that situation. That explains why there’s a lot of people that are really worried at the moment about the economy. About having a secure job. About not getting a pay rise when they really need it.
JOURNALIST: A veteran military analyst Derek Woolner is warning that Australia’s attack class submarine is likely to be inferior to those operated by neighbouring countries, and may even be obsolete before it’s due into service. Because it uses lead acid batteries and not lithium ion technology. Is that something that is potentially worrying for Labor?
CLARE: It’s not something that I’ve seen this morning. But obviously submarines, our existing Collins Class submarines and our future Attack Class submarines play, and will play a very important role in the defence of Australia. We’re an island continent. Submarines are a very important part of the deterrent effect in protecting Australia from any country which would wish to do us harm today, or into the future. I haven't seen the details, as I said of those reports, but I would encourage the Government to look at those and respond.
JOURNALIST: But given that particular warning, do you think that our submarines will still be competitive with those operated by our neighbours when they’re ready?
CLARE: Again, without having access to information about the type of technology used by neighbouring countries and the type of technology that would be made available in these submarines its difficult for me to provide further comment.
JOURNALIST: And just on Constitutional Recognition. Liberal MPs have given conflicting ideas on what Indigenous Constitution Recognition looks like as a Party this week. Do you think that this is going to hinder the Government’s ability to make meaningful reform on this issue?
CLARE: I want to congratulate Ken Wyatt for the speech that he made this week and for setting a target to take this question to the Australian people in the next three years. We've been waiting a long time, way too long for this to happen. As I said this morning on television, our Constitution is incomplete. I think Noel Pearson once said that our Constitution is like our birth certificate, and it doesn't have one parent’s name on it. We can fix that through putting together a preamble which recognises that this is a country which wasn't forged in 1770 when Captain Cook arrived. People have lived here continuously for 60,000 years. You should do that in the Constitution. We should also, if we can, remove those sections of the Constitution which are racist. Sections like Section 25 that say the States can make laws so that certain people of certain races don't get to vote.
I am worried that there is division inside the Liberal Party on this. We will only succeed in completing the Constitution, recognising Indigenous Australian in the Constitution if both major political parties, Labor and Liberal come together to help make this happen, and work together in the community to make this something that all Australians will embrace.
JOURNALIST: Just finally with the White House visit. It’s the first time a state dinner has been put on since John Howard, I think. Do you think that’s a positive sign that the relationship between Scott Morrison and Donald Trump is strengthening?
CLARE: It’s a good sign. Australia has always – whether they are Prime Ministers of a Labor or Liberal background, or Presidents of a Democrat or Republican background - been able to forge good and close relationships with our American counterparts. The relationship that Bob Hawke had with Ronald Reagan is a fantastic example of that. I wish the Prime Minister well on his visit. Having good, strong relations with our American friends is a very important part of making sure that Australia's best interests are served. Not just security interests, we have a strong alliance with the United States, but remember this as well that the United States and U.S companies are the biggest investors in Australia. It’s not just a security relationship. It's not just an economic relationship either. We share common values and interests. Strengthening that relationship between Prime Ministers and Presidents will only help to make sure that relationship gets stronger in the future.
MEDIA CONTACT: BENJAMIN GRANGER 0431 169 554