The surge in mortgage delinquencies for the March quarter is more evidence home borrowers are struggling as a result of Labor’s debt-financed spending binge, said Shadow Minister for Housing, Senator Marise Payne.
Senator Payne said the Fitch Ratings survey which showed the percentage of borrowers in arrears for more than 30 days rose from 1.37 per cent to 1.79 per cent and those behind more than 90 days went up from 0.54 per cent to 0.79 per cent to 31 March, clearly showed homeowners are suffering from Labor’s financial mismanagement.
“Labor’s $135 million a day borrowing habit is putting pressure on inflation and interest rates and this is feeding through to home mortgages,” Senator Payne said.
“Of particular concern is the percentage of low-doc borrowers - who are largely self-employed – in arrears for more than 30 days, which has risen from 5.7 per cent in the December quarter to 6.74 per cent in March 2011.
“Julia Gillard and Wayne Swan like to talk incessantly about an imaginary surplus in two years but the fact remains that Commonwealth net debt is projected to be $107 billion for 2011-12, which costs $5.5 billion each year just to service, not to pay back, rising to $7.5 billion by 2014-15.
“Labor continues to compete with banks in the wholesale debt markets, driving up the cost of funding and this is demonstrated by the gap between the Reserve Bank cash rate and the standard variable mortgage interest rate which is 3 per cent under Labor, compared to 1.8 per cent under the Howard Government.
“By running big deficits during a terms-of-trade boom, Labor is also leaving nothing in reserve for emergencies. We saw the consequences of this when Labor had to resort to slugging Australians with a flood levy of nearly $2 billion following the Queensland floods.
“And this is all in addition to Labor’s carbon tax which will drive up the cost of everything for families and small business owners struggling to get ahead and the mining tax which will drive jobs and investment offshore.
“Labor must tighten its belt and set a better example for Australians who are struggling with the rising cost of living.”