“The reality of 24% clearance at auctions in Brisbane on the weekend, less than 50% clearance in the major market of Sydney and record listings in Melbourne (Courier Mail – 17 March 2008) has shown the precarious nature of the values in the western suburbs of the eastern capitals due to the close association of the pressures of debt and the impetus to sell. Unfortunately, the fundamental economics of our nation may unravel with the coupling of the Australian economy to US factors and the associated global economic consequences.

“The facts are: oil is currently US$110.21 a barrel; the stock market is progressing quickly down the path of uncertainty; interest rates are forcing working families beyond their budgetary tipping point; superannuation is tied to a stock market crisis with the retirement incomes of the nation at stake; the Asian requirement for Australian resources is tied to US consumption which is heading, or, is in recession. These issues, in combination, require competency currently beyond that offered by Mr Swan.

“It has become an issue of national critical importance. Mr Swan and Mr Rudd have seemed reluctant to address the economic international crisis in any reasonable and determined manner in substantive and circulated policy statements. They have had time and far more resources than I when in October 2007 I stated:

“Economic management will be well and truly tested in the coming years, not so much by interest rates, but by a possible US recession. This is the issue which needs to be addressed and if you have not packed good economic management into your nation’s parachute, unfortunately, you will bounce.”

“But not one substantial and central policy statement can I find being followed that ascertains the government’s attachment to this, away from the peripheral, and recognises their crisis is managing the international pressures on our economy, rather than any domestic crisis.

“In fact, in their inability to talk down interest rates they have exacerbated the consequences for our nation. Because they have placed the nation higher up the cliff, we now have further to fall and the Australian Stock market is reflecting that. The US share market has dropped 15% since 1 October 2007 and the Australian share market has dropped 21% in the same period.

“Mr Rudd has to be decisive enough to make the call as to whether Mr Swan is up to the job. He must do it now as the ramifications are dollars and cents in the working family budget. The key office holders of this nation are a reflection of Mr Rudd’s judgement and the nation can not afford the consequence that, at this crucial juncture, the Prime Minister lacks judgement.

“Interest rates, home equity, liquidity ramifications for banks, food and fuel budgetary pressures, foreclosures and the cyclical downturn of equity because of the increase supply of houses on the market and the fact that Australian superannuation is tied to equity in a share market under threat; all of these factors and more are part of a problem triggered by international circumstances.

“There seems to be intransigence, inertia or incapacity for Mr Rudd and Mr Swan to come to grips with this, the primary responsibility now. Instead, while passing laws to increase wage pressures they offer the juxtaposed and peculiar panacea that the central issue to Australia’s problems is cured by addressing domestic inflation, with the blunt monetary instrument of high interest rates to deliver this outcome.

The problem is far more complex and though one would never consider there is a total solution that could be generated domestically, a program to mitigate the effects has to be far more detailed than the one currently offered.” Senator Joyce said.



Ends