A landmark national ‘health’ report has been slammed as pointless for using outdated data to suggest things are ‘improving’ for Australian home borrowers – even after 12 rate hikes.
Treasurer Jim Chalmers’ inaugural ‘Measuring What Matters Australia’s First Wellbeing Framework’ report, released on Friday, contains a series of findings based on outdated data.
Comparison of housing services in 2002-03 with 2019-20 A section titled ‘Financial security and access to housing’.
The situation for mortgage holders was described as ‘improving’ despite interest rates rising 12 times in 13 months and further rises likely in 2023.
Treasurer Jim Chalmers has been slammed after his landmark health report suggested things were ‘improving’ for Australian home borrowers – even after 12 rate hikes
Asked about the older data, Dr Chalmers told ABC Radio national broadcaster Patricia Karvelas that the government had more recent data it could rely on.
‘Well, some things about it,’ he said.
‘We have more regular, more frequent data that helps us understand where people are under pressure after higher interest rates and the pandemic.’
But Dr Chalmers denied the report was up to scratch.
‘I’m not saying that. I am saying we have not had a national wellness framework before, this is the first attempt at it,’ he said.
Shadow Treasurer Angus Taylor said on Friday that the report was ‘outdated and out of touch’.
“We don’t need half-baked reports on the health of Australia,” he said.
‘The Treasurer needs a reality check, and the truth is that Australians have had 11 interest rate rises since Labor came to government.’
The health report’s data on ‘housing serviceability’ was so outdated that it cited data from the 2019-20 financial year when the Reserve Bank of Australia cut the cash rate four times – from 1.25 per cent in July 2019 to 0.25 per cent at the start of the pandemic by March 20, 2020.
But since May 2022, just before the election, the RBA has raised interest rates 12 times, from a record-low of 0.1 per cent to an 11-year high of 4.1 per cent, pausing only in April and July.
Far from easy, a borrower with an average $600,000 mortgage saw their monthly payment increase 64 percent from $2,306 to $3,789.
Annual repayments increased to $17,796.
This came as the variable rate on a Commonwealth Bank loan, for a borrower with a 20 per cent deposit, rose from 2.29 per cent to 6.49 per cent.
Australia’s Labor government has copied former New Zealand Labor Prime Minister Jacinda Ardern who delivered a ‘healthy’ budget in 2019
The situation for mortgage holders was described as ‘improving’ despite interest rates rising 12 times in 13 months and further rises expected in 2023.
Interest rates rose at the fastest pace in a little over a year since 1989 and the RBA expects it to remain between two and three per cent above its target until mid-2025.
The report also focused on housing costs before the pandemic but said nothing about house price growth in late 2020 and early 2022, reducing housing affordability, while interest rates were still at a record-low of 0.1 percent.
‘This cost-to-income ratio was generally stable over the past few years prior to the Covid-19 pandemic,’ it said.
Dr Chalmers said in a statement that the Welling Framework was designed to ‘help us inform how we are tracking over time, where we are doing well and where we need to do better’.
‘Part of a deliberate effort to put people and progress, fairness and opportunity at the core of our thinking about our economy and our society, now and for the future,’ he said.
Australia’s Labor government has copied former New Zealand Labor Prime Minister Jacinda Ardern who delivered a ‘healthy’ budget in 2019.
Australia has a habit of copying the Kiwi concept, adopting inflation targeting in 1993, three years after New Zealand.
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