First time home buyers are more concerned about the risk of another interest rate rise than whether the states should end stamp duty on house purchases the Federal Opposition said today.
Financial markets are betting on another interest rate rise this year following comments by a central bank official last Friday suggesting that the four interest rate rises since 2004 have yet to kill-off inflation pressures completely.
"If you look at the impact of those interest rate rises, they've added $88,000 to the cost of a home in Sydney of $450,000, and of course that's a home in Sydney where a first home owner wouldn't be paying any stamp duty at all," Labor treasury spokesman Wayne Swan said.
Treasurer Peter Costello is putting pressure on states to get rid of stamp duty, a tax that should have been removed with the introduction of GST in 2000.
"So what we've got out there this morning is the same old Peter Costello playing the same old blame game because he won't put up his hand and accept responsibility for the fact that inflation is driving up interest rates over time," Mr Swan said.
"The impact of four interest rate rises since the last election when he promised to keep them at record lows is causing housing stress, particularly in western Sydney."
Mr Swan said housing affordability is a complex problem.
"The first problem is the level of interest rates at the moment and certainly many home owners out there would not be welcoming another interest rate rise. That's number one," he said.
"There's a whole host of factors, at the state level, local government level, a whole host of factors that if we had some political leadership from the Federal Treasurer, who accepted some responsibility for just once in his life, then we could consider all of those things together."
Source: AAP
