Flat White

Will Albo bring the Keating interest rates back?

10 May 2022

4:00 AM

10 May 2022

4:00 AM

In 1975, when Gough Whitlam came to power, Labor’s free tertiary education scheme meant that I could go to university. I was pretty happy with that because I came from one of the less reputable council slums in Brisbane. We voted Labor because we were poor and Labor meant a fair go, then…

Interest rates for home loans in 1975 under Whitlam were around 10 per cent.

Then came the Hawke/Keating era.

I still voted Labor, but as a wage earner and a potential home buyer, I was a bit wary of promises and more aware of employment issues, inflation, and recession.

The interest rate on mortgages was over 18 per cent in 1989 under the ‘World’s Greatest Treasurer’, Paul Keating. When it climbed to 22 per cent, people were in terrible financial straits.

This was not just a ‘tighten your belts’ situation, this was destitution.

It destroyed ordinary families who were working two or three jobs to keep up with the horrendous level of mortgage debt. People could literally not do any more to help themselves, no matter how hard they worked. They could see no way out and suffered family break downs, unbearable stress, and financial destruction.

This was a time of mortgage foreclosures, banks repossessing homes (sometimes several in the same street). This was a time of repayments being put on hold and debt climbing sky high as a result. People could not get out of debt by selling. Real estate values had plummeted because the economy had flipped to a buyer’s market. People lost their homes and families broke down.

This nightmare can easily be the case again with typical Labor mismanagement.

By the time of the interest rate hikes, I had married, bought a house, and had a medium sized mortgage.

I began to listen to the news and read the papers in an effort to try to make sense out of the economic mess that our country was then in. I came to dread the nightly news, with predictions of yet another rise in interest rates. We wondered what we could save on and how we could cut the family budget even further to have more money to feed into the mortgage monster? It was impossible.

I decided to raise the issue of how people were being affected by the mortgage stress, with the local media. I went to the local paper, The Canberra Chronicle, and they ran a story about how the ineffective financial strategies of the ‘World’s Greatest Treasurer’ were impacting people.

When the story came out, it started an avalanche of phone calls, faxes, and letters from people telling me their stories of financial hardship, asking for help, and expressing their outrage. I spoke on radio shows, gave newspaper and TV interviews, and spoke at meetings in capital cities and country towns around the country. People were fed up, as fed up as I was, with the poor financial management of an arrogant and haughty government.

I was no longer going to vote Labor.

The Labor party of my childhood was gone replaced by careerists – the Keatings, the Keneallys, the Kellys, and the Whitlams.

I had an argument with Ros Kelly, a then star for the ALP, who angrily said I should lay off my criticism of Keating. She even had me sit in her Woden office, with the famed Whiteboard front and centre, while she gave me a dressing down. So, out of spite, I ran as an independent against her. There were several other independents who ran that year. We wanted these careerists out.

Kelly lost her seat and Keating lost government. We didn’t need to win a seat in the Senate to have won a victory at that election.

It was a good feeling to know that the people had spoken and stopped the bastards from beating us down.

Once Howard was in the driver’s seat, interest rates began to settle. It was not an instant change, but it was better. People could think of living a normal life, of working, having enough for simple holidays, and giving their kids a future again.

For those amongst us who were not affected by this terrible financial mismanagement, who scoff at my recollections, I say, weren’t you the lucky ones… For those who say it wasn’t that bad, that Keating was a great Treasurer and Prime Minister, I say, how lovely for you that your memories are coloured by your politics.

Mine aren’t.

If a party goes bad then I cut them adrift. I have skin in the game. I care about what happens to people embarking on the home ownership journey. I don’t want them to suffer the way previous generations have under Albanese’s New Labor.

The difference in the approach to rising interest rates, between Liberal and Labor is that the Liberals manage the situation in front of them to avoid outrageous financial stress. They understand how to budget and how to respond to pressures. Labor does not. This is evident in their history. Google the Reserve Bank’s history of interest rates and it will become abundantly clear.

If you can manage a rate rise by getting a cheaper phone plan or disconnecting Netflix, then it’s okay. This is what we are talking under Morrison.

If you need a second job to pay the mortgage and can’t pay your power bills or give your kids good food, then it’s a disaster. This is the likely outcome under Albanese.

In a 1986 press release John Howard described what the Keating/Hawke government was doing wrong and how they could fix it. He also predicted the disastrous effects this would have on mortgage-paying families. He saw the problems coming that would destroy families and warned Keating that he needed to fix it. Keating ignored these warnings and everyone but Keating suffered.

Albanese, like Keating, has no skin in the game. They are untouchable, courtesy of their jobs-for-life careers in the Labor Party hierarchy. Neither ever had a job in the real world.

Now, it is about to happen again. Interest rates are on the rise, due, as before, to global market pressures.

But this time we are forewarned. This time the first rise has been minimal. The Morrison government understands what is happening and they are managing it well. They are a team; they have a handle on our economy and have steered us through some extremely tough times.

Other countries in the developed world are not doing as well as Australia. America is a basket case and it’s going to get worse for them.

This election is about Albanese’s career and his ability to wield power.

I do not trust a man who hands over to his underlings whenever there is a question on finance to run the Australian economy in a way that will protect the people of this country from economic and social harm, or from Very High Mortgage Interest Rates.

Do you?

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