Page 875 - Week 06 - Tuesday, 25 July 1989
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MRS NOLAN (4.35): I am disappointed today that Mrs Grassby is not in the chamber but, unfortunately, it cannot be helped that this matter came up on this day.
Mr Speaker, my colleague Mr Stefaniak has told us just how hard interest rates are hurting. As he so correctly pointed out, they are placing an immense economic burden on those attempting to buy homes. They are placing incredible pressure on many families both financially and emotionally and, as Mr Stefaniak has made clear, are severely affecting the real estate, building, welfare and employment sectors of our economy.
Mr Speaker, Mr Stefaniak has explained to us the crisis that the Labor Party's high interest rate policy is causing our community. As a continuation of what he has said, I would like now to bring to attention some of the aspects of this crisis. It would then be appropriate, Mr Speaker, to outline some of the solutions to the crisis. Of course, unfortunately, the major solutions are out of our control. The Federal Labor Government clearly needs to change its policy direction. The solutions of which I will speak today should be considered by this Government as a matter of urgency.
Of dramatic importance to our community is the effect that interest rates are now having on our building industry. The signs for building look very ominous indeed. Current figures on the building industry do not indicate the enormity of the problem; anything being quoted is two or three months old. Thus, I stress that statistics do not truly paint the picture. It would seem to an observer that the building sector is in a fairly stable position, but such an observation is a delusion. It is a delusion because of the changes that are about to happen.
Construction in Canberra, unlike that in Sydney, did not experience boom levels of activity in 1987-88, nor did Canberra have a shortage of residential land. For these reasons, Canberra can expect a softer landing than most other Australian capital cities, because it has not come off the end of a housing boom. Nevertheless, a potentially dangerous downturn in construction is about to occur because interest rates are high. Presently in Canberra building activity is at a good level, but that is because it is coping with a backlog of work that the industry has experienced due to the long stretch of bad weather earlier this year, but this backlog of work is nearly completed. This leaves the building industry with nowhere to go.
As Mr Berry has already said, approvals for the first two quarters of this year already indicate that a downturn in building will occur. The figures from the March quarter show a decrease of 17 per cent compared with the same quarter for last year. The inquiry rate for new homes has decreased; the level of purchases of new homes has decreased; the number of starts for new construction has
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