Australians are feeling the pinch. It is as clear as day when you walk in to a mostly empty service or retail store and speak with the owner.
A hairdresser friend tells me clients come in less often. The café owner on the corner tells me the average customer spend is less and the local butcher tells me that budget cuts are back in vogue.
When asked as to why, the answer is always the same. Interest rates are rising and Australians are in too much debt. Even worse, they were encouraged into debt by the Rudd Government and the government is now adding to their pain.
First things first: for most of us, the largest debt we have is our mortgage and Australians have fallen in love with big mortgages like never before. I have often expressed concern that the first home owners grant (FHOG) simply inflated property prices and that Labor’s decision to double it while interest rates were at extremely low levels simply compounded the problem.
For any government to give cash as an incentive to those with limited ability to save, so they can borrow a pile of money in order to buy an already overpriced house, is sheer madness. Yet this is exactly what Kevin Rudd and his reckless band of government spendthrifts did.
Now I know the FHOG was introduced by the Howard Government but it was brought in to compensate for the introduction of the GST. That time has passed and any justification for its continuation is misplaced, especially when people are complaining of houses being unaffordable.
Of course, borrowing a great deal of money when interest rates are at record lows is easy. Affordability skyrockets when mortgages are around five per cent. The difficulty comes when they rise by 50 per cent or more.
And here again the Rudd Government has failed the people of Australia. Their massive stimulus spending is stimulating the economy when the Reserve Bank is trying to slow things down by lifting interest rates.
If the Rudd Government had spent more prudently and targeted its spending more efficiently, in all likelihood interest rates would be much lower than they currently are. The fact that the Rudd Government continues to allocate billions of your future dollars to a range of rorts means they are ripping you off with every mortgage payment.
While the building industry has seen more millionaires created through the BER (Builders Enrichment Revolution) than almost ever before and the insulation industry has feasted (but are now fasting) thanks to this government, the negative effect is being felt by most of the non-government fuelled sectors of the economy.
Outside of those special interests that have been the recipient of Rudd largesse, the rest of us can be considered the forgotten people. The small business owners, the mortgage owers, those who want to get on with life without the heavy hand of government – people like you and me.
The Liberal Party was formed to speak for these forgotten people. At the next election we’ll have a chance to be your voice again.
Cory Bernardi is the author of seven books and has been a member of the Australian rowing team, a publican, an investment portfolio manager and spent nearly 14 years as an Australian Senator.
