Triple whammy for low income households: CSSA
The combined impact of yesterday's rise in interest rates, higher petrol prices and the effects of the new WorkChoices legislation will seriously affect the ability of many Australians to service their hefty mortgages, Catholic Social Services said yesterday.
Frank Quinlan, Executive Director of Catholic Social Services Australia (CSSA), said yesterday's interest rate hike, the second in three months, will particularly impact those on low incomes who pay rent, and families with hefty mortgages.
Yesterday's rate rise was the seventh since 2002 and the third since the last election. The last time official rates were 6 per cent, in early 2001, household debt was $425 billion but this has now ballooned to almost $900 billion.
Mr Quinlan said the combined impact of higher petrol prices and interest rates could increase expenses by as much as $80 a month for a family with a $200,000 mortgage and a modest family car.
"With the decreasing availability of public housing, an increasing number of lower income families are at the mercy of the private rental market which is very susceptible to increases in interest rates," Mr Quinlan said.
"Any tax breaks delivered to middle or low income families in the May Budget are being eaten away."
He says the new workplace reform threatens working conditions like penalty rates and overtime time that have traditionally boosted family income.
"Coupled with rising petrol prices the effects on low income households will be dramatic, said Mr Quinlan.
According to Mr Quinlan minimum wage is currently under review by the Fair Pay Commission, and the Australian Catholic Commission for Employment Relations has called for a weekly increase of $20 in line with the recent increase granted in NSW.
"With another rate hike anticipated before the end of the year, the Government must act quickly to limit the impact on families and low income Australians," he said.
"More must be done to increase the opportunity for low income earners to buy their own home, through changes to the First Home Owners Grant, and to make private rental accommodation affordable.
"The implications of interest rate rises and trends in home ownership amongst low income earners must be central to negotiations in the next public housing agreement, which is due to commence early next year," Mr Quinlan recommended.
Catholic Social Services Australia (Media Release, 2/8/06)
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