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The Impending ‘Mortgage Cliff’: Devastating Consequences of Rising Interest Rates

Introduction:

The financial landscape in Australia is undergoing a significant upheaval as interest rates continue to rise. Interest rates will always be higher under a Labor government, and people expect that. People didn’t expect the sudden and vicious rise of interest rates.

The consequences of this alarming trend are dire, particularly for the hundreds of thousands of Aussies teetering on the edge of a looming ‘mortgage cliff.’ Let’s look at the 5 top aspects of the interest rate rises this year.

1. The Burden of Expired Fixed Mortgages:

News.com.au reports a growing number of Australians are bracing themselves for a sudden plunge into debt as their fixed-rate mortgages expire. In the next six months alone, a staggering 880,000 homeowners will have to switch from fixed to variable property loans, with a further 450,000 loans set to expire next year. Shockingly, data from CoreLogic reveals that 35% of all outstanding fixed mortgages will pass this year, repricing 23% of all home loans.

2. Soaring Costs and Financial Strain:

The consequences of the mortgage cliff are staggering. Homeowners, especially those on the fringes of major cities like Brisbane, Sydney and Melbourne, are particularly vulnerable due to their larger mortgages. For instance, a household with a $1 million loan may need to find an extra $2,000 per month or a staggering $24,000 per year to meet their mortgage obligations. These high costs paint a grim picture of many families’ financial strain.

3. Disproportionate Impact on Affordability:

The already unaffordable housing market further exacerbates the impact of rising interest rates. Average Sydneysiders, for example, must spend 52% of their income compared to 44% before the interest rate hikes. This alarming increase highlights the absurd nature of mortgages and the mounting pressure on homeowners.

4. Struggling but Holding On:

While some Australians are cutting back and preparing for the worst that a Labor government will dish up on the mortgage front, data shows that 0.7% of homeowners are more than 90 days behind on their mortgage payments. This staggering figure will only lead to more homelessness, as 0.7% of Australians are thrown on the streets by an incompetent and chaotic Labor government, which will only exacerbate our housing crisis.

5. House prices keep rising:

Because of reckless increases in Australia’s immigration intake, the property market has experienced a 2.3% increase since hitting a low in February. This growth means that some homeowners have seen a rise in the value of their properties. The Reserve Bank of Australia reports that only 2% of homeowners have experienced a decline in property value. This means it will be harder for Australians to buy a new home, instead of leaving our children with nowhere to live while foreigners buy all our houses.

Conclusion:

The rising interest rates in Australia have triggered a looming crisis known as the ‘mortgage cliff,’ with devastating consequences for homeowners nationwide. The burden of expired fixed mortgages, the soaring costs, and the disproportionate impact on affordability create significant financial strain.

(source: News.com.au)

Rale Rasic OAM

Rale Rasic was a football pioneer who leaves a mighty legacy.

His playing talent brought him from his homeland in then-Yugoslavia to Footscray JUST. The joy and success he found there launched his coaching career and made Australia his home.

Only eight years after his arrival in Australia and at just 34, Rale was appointed coach of the Australian national team. A courageous choice that would launch a bold new era.

Rale had a passion for education and a great instinct for bringing out the best in his players. He set new standards for professionalism, fitness and commitment and achieved groundbreaking success.

Like all great motivators of people, Rale’s philosophy had a powerful simplicity. His players knew that he would do anything for them, if they worked hard for him.

Of course, Rale’s finest hour came when his Socceroos won through a gruelling and exhilarating set of qualifiers to make their first World Cup finals in 1974.

Against great footballing nations, that Australian team stood tall and they won many admirers here and overseas for their determination and resolve.

It would be 32 years before Australia returned to the biggest stage but Rale Rasic’s passion for the game and his belief in the potential of the country he had made his home never faded.

Like his dear friend Johnny Warren, he was one of Australian football’s keepers of the flame. Guiding and inspiring the next generation, commiserating in their setbacks and delighting in their success.

Sport loves a legend but few have done more to earn that title than Rale Rasic.

He will be greatly missed, fondly remembered and always respected.

May he rest in peace.

A GENTLE GIANT – EULOGY FOR BRUCE CHILDS

The political world is filled with people with sharp elbows, but Bruce Childs wasn’t one of them.

Guided in perfect tandem by the passion of his convictions and his unwavering kindness, Bruce was a gentle giant of the labour movement.

He was a trade union secretary. ALP official. Senator. National ALP Left convenor. Evatt Foundation president and life member.

A peace activist. A man of principle, commitment and loyalty.

A man who spoke up for those who couldn’t.

And a man who knew that the Labor Party could not live up to its ideals and potential until it counted more women in its ranks.

Bruce always placed what was right ahead of any sense of personal ambition.

He also knew what it was to be a representative of the minority group in Sussex Street. I believe “character-building” is one of the phrases used.

It’s telling that even at a time when politics was being played at its hardest, and anything resembling even cordiality across party lines was the rarest currency of all, Bruce was viewed with admiration and affection across the spectrum.

He was a man of so many facets.

And, like so many, I had the great fortune of being able to count him as a friend and mentor.

What he had within him was one of the most powerful combinations a human being can contain: gentleness and strength. Two great qualities that reinforced each other.

Few people were better placed to recognise that combination than another of its most noted practitioners, the great Tom Uren.

Tom described his dear friend as:

“… a patient negotiator and an outstanding administrator … [and] one of the most outstanding collectivists I have known.”

When Bruce took his final leave of the Senate, he said something that has remained in Hansard as a guiding star for everyone since. And I quote:

“I have never identified with being a politician, but I really do identify with being a parliamentarian.”

Those are the words of a man who entered politics for the best possible reasons. A man who, amid all the noise and distraction and temptation, was guided by the truest spirit of public service – and we were all the better for it.

A man of integrity. A man who respected the best of our traditions and earnt the respect of all who had the privilege of knowing him.

We are here because we admired Bruce – all that he was and all that he stood for.

But above all, we are here because we loved him.

None more so than his family.

Yola, Steven and Bet – you are all so very much in our hearts. Bruce’s love lives on in you.

May Bruce rest in peace.

Dudley Beach Road resealing to enhance visitor safety and access to Dudley Beach

An essential maintenance project to reseal one kilometre of Dudley Beach Road is getting underway in Glenrock State Conservation Area.

NSW National Parks and Wildlife Service Area Manager Mitch Carter said the $350,000 project will improve visitor safety and ensure convenient access to the well-loved Dudley Beach.

“Dudley Beach Road is extremely well-trafficked by the surfers, beach walkers and local residents who love the stunning, sandy shores of Dudley Beach,” said Mr Carter.

“As the road has aged, cracks in the road surface have allowed water to get in under the road, leading to potholes.

“This resealing project will result in a new road asset for Dudley Beach with an expected life expectancy of 20 years or more. It will also complement the recent upgrade of the Dudley Beach car park in 2022,” said Mr Carter.

Site workers will reform the road surface to produce a trafficable, smooth and drained pavement. Existing drainage structures will be repaired or reconstructed, as required.

The resealing project will commence Wednesday 14 June 2023 and scheduled for completion by Wednesday 28 June 2023, weather permitting.

Dudley Beach Road will be closed on weekdays while works are underway. The road will be reopened on weekends to minimise disruption to beachgoers and local residents.

Throughout resealing works, visitors to Dudley Beach are advised to adhere to safety signage and instructions that will be in place on Dudley Beach Road.

Alternative pedestrian access to Dudley Beach will be available via the Bombala walking track and the Banksia fire trail. Check the NPWS Alerts webpage for updates.

The 554-hectare Glenrock State Conservation Area is nestled on Newcastle’s urban fringe and is estimated to attract one million visitors a year.

Glenrock State Conservation Area is on the traditional Country of the Awabakal people and is home to five threatened ecological communities including littoral rainforest and 10 threatened animal species such as the squirrel glider.

The reserve is well used by Newcastle locals including bushwalkers, trail runners, mountain bike riders, surfers, Scouts, horse riders, hang gliders and abseilers, local residents and families.

CLIMATE ACTION, NOT VIRTUE SIGNALLING, WILL HELP PROTECT GREAT BARRIER REEF

No amount of Minister Plibersek’s “formal commitments” to protect the Great Barrier Reef will provide cover from the impacts of new fossil fuel projects she continues to greenlight.

Greens spokesperson for healthy oceans, Senator Peter Whish-Wilson said:

“The Great Barrier Reef as we’ve been lucky enough to know it in our lifetimes isn’t dying by accident. It’s being degraded by governments content with greenlighting new fossil fuel projects which spew millions of tonnes of CO2 into our atmosphere and turbo charge the warming of our oceans.

“It’s ironic that while Minister Plibersek was virtue signalling the Government’s commitment to protecting the Great Barrier Reef, just yesterday the BOM issued a grave warning of the increased likelihood of an El Nino event this summer, which could have devastating consequences for the Reef.

“No amount of money or Minister Plibersek’s ‘formal commitments’ to protect the Great Barrier Reef will protect it from an El Nino marine heatwave event caused by rising emissions from the burning of fossil fuels.

“So long as Labor continues to greenlight new fossil fuel projects we will continue to see more annual coral bleaching events – end of story.

“Labor can throw all the money it likes at the Great Barrier Reef to avoid an embarrassing Unesco World Heritage ‘in danger’ listing, but the only thing that will save it from danger is a dramatic decrease in fossil fuel emissions. It’s new coral or new coal, you can’t have both.”

Visit to Australia by Tuvalu’s Foreign Minister

Today I welcomed Tuvalu’s Foreign Minister, Simon Kofe, to Adelaide. I was delighted to meet Minister Kofe again, after my visit to Tuvalu in April.

Minister Kofe’s visit was an opportunity to build on Australia and Tuvalu’s strong development and defence cooperation, people-to-people ties and discuss our shared aspiration for a safe, prosperous and resilient Blue Pacific.

Alongside all Pacific leaders, Australia recognises climate change is the single greatest threat to the livelihoods, security and wellbeing of the peoples of the Pacific. Australia is proud to be supporting Tuvalu’s Coastal Adaptation Project, to protect Tuvalu from the impact of rising sea levels and cyclones.

Australia is providing an estimated $17.1 million in Official Development Assistance in 2023-24 to Tuvalu for education, infrastructure and climate change. Australia is also providing budget support of $9.5 million to Tuvalu this financial year, including an increase of $5.5 million announced when I visited Tuvalu in April.

The links between Australia and Tuvalu also include support to manage maritime zones through the Pacific Maritime Security Program, and hosting Tuvaluans participating in the Pacific Labour Mobility Scheme, who make contributions to the economies of both countries.

During his visit to Adelaide, Minister Kofe and I toured the Nature of Culture Exhibition at the Art Gallery of South Australia. It was an opportunity to reflect on the contribution of Australia’s First Nations peoples to our international ties and the Pacific region.

“Ocean’s Eleven” supports offshore mining ban

Eleven different marine and environmental groups have come together today on World Ocean Day to support the NSW Coalition’s proposed legislation to prevent offshore coal, gas, mineral and petroleum mining, and exploration in NSW waters.

The Minerals Legislation Amendment (Offshore Drilling and Associated Infrastructure Prohibition) Bill 2023 will deliver on the Coalition’s long-held policy to prevent offshore mining and exploration in NSW waters.

Professional sportspeople, community advocates, scientists and economists joined environmental groups in a strong show of support for the Bill.

“On World Ocean Day we’re calling on all political parties and independents to unite behind this important bill, which will provide certainty for our coastal communities,” Opposition Leader Mark Speakman said.

Shadow Environment Minister Kellie Sloane says the Coalition’s legislation cements its opposition to offshore gas exploration and mining.

“Our coastal communities have long been opposed to offshore drilling for gas. We have listened. We made a commitment. And now we are acting on that commitment.”

“These new laws will make it clear to anyone looking to drill for gas in NSW waters they can forget about it.”

Member for Pittwater Rory Amon will introduce the Bill, as one of his first acts as the new local member.

“This is a strong demonstration that the Coalition will continue to stand up for our communities, and the people of NSW, and act when the Labor Government fails to do so.”

To help tackle beach erosion, the proposed legislation will continue to allow mineral exploration or mining in NSW waters for beach nourishment where a clear public benefit can be demonstrated.

Member for Manly James Griffin has been a strong voice advocating on behalf of the local community.

“As the Member for Manly I have long campaigned to ensure our coastline remains pristine and protected. Today is another example of my commitment to that mission”.

Unfunded promises will cost NSW households

NSW Liberal Leader Mark Speakman has called on the Minns Labor Government to protect household budgets from increasing cost of living pressures.

As households across the state are hit with another interest rate rise, the Labor Government won’t come clean on what programs will be cut to deliver their unfunded $618 million per annum wage offer to union bosses.

“At a time when many families are struggling, the last thing they need is for this government to cut vital programs like Active Kids. The Premier needs to prioritise families ahead of deals with unions,” Mr Speakman said.

“The Minns Labor Government must immediately explain how they’ll pay for their unfunded wage offer.

“The Labor Party went to the election claiming that wage increases would cost $0, but that has now been proven to be a lie.

“They had also promised before the election that productivity savings would be made to offset increasing public sector wages, but so far no savings have been identified.

“With the state now facing a $618 million annual bill, we don’t know what will be cut to pay for it.

“A responsible government does not offer unfunded pay rises or put additional pressure on people across this state at the worst possible time as prices and interest rates skyrocket.”

“Wage increases for public sector workers are important, but they shouldn’t come at the expense of cost of living support for families and households who are struggling during these difficult economic times,” Mr Speakman concluded.

Labor backflips on failed rental reform

Labor has failed in its first attempt at rental reform, backflipping on the secret rent bidding ban and abandoning the measure.

Opposition Leader Mark Speakman said that it was clear that Labor hadn’t done the work in developing legislation to ban secret rent bidding.

“The Government rushed the process, did not properly consult and ignored warnings,” Mr Speakman said.

“It’s day 74 and the broken promises are mounting. They’re backflipping on election promises. They promised to ban secret rental bidding and have now backflipped. They promised to roll over Active Kids and are now looking to cancel it. They promised that extra wage increases would cost nothing and be offset with productivity gains but it’s now going to cost $618 million per annum. They promised no privatisation but they’re now looking to privatise public land.”

Shadow Fair Trading Minister Tim James said the government should have never attempted to introduce such under prepared policy.

“Labor has let down renters. During a rental affordability crisis we need a government that understands the issues facing the people of NSW instead of making life harder.”

“If Labor did the homework, and listened to the community and experts earlier, it wouldn’t be forced into a backflip on this poorly conceived idea that everyone had said would inflate rents,” said Mr James.

“The government needs to explain why they ignored repeated warnings that this policy will create a rental auction that fuels rent increases, putting a home further out of reach for millions of NSW renters.”

“This flawed process has placed uncertainty and anxiety on renters and the property industry.”

Mr Speakman said the people of NSW deserve better from their government.

WESTERN SYDNEY AIRPORT SECURES AGREEMENT FOR FIRST FLIGHT

The Australian Government has welcomed Qantas and Jetstar as the first airlines to sign up to the Western Sydney International (Nancy-Bird Walton) Airport (WSI) to operate domestic flights.

This agreement is expected to support more than 25,000 flights, carrying more than four million passengers, through WSI each year – and will support 700 jobs.

WSI is a transformational infrastructure project that will generate economic activity, provide long-term employment opportunities in the Western Sydney region, and meet Sydney’s growing aviation needs.

Delivery of Australia’s newest airport has now also reached another major milestone, passing the halfway mark.

Over 4,300 direct jobs have already been created by the airport’s construction, with half being from Western Sydney and around a third learning new skills on-the-job.

More than 250 Western Sydney-based businesses have been engaged by contractors across construction, catering, security and other sectors.

WSI is on track to start operations by late 2026.

Prime Minister of Australia Anthony Albanese said:

“It’s exciting to see Qantas and Jetstar being the first airlines to commit to Australia’s newest airport, which will offer international and domestic passenger as well as freight services from Western Sydney.”

“This is a strong sign of support from the airline industry and continues the commitment we are seeing from the business community to invest in Western Sydney. That means more jobs for Western Sydney locals, as well as unlocking opportunities for apprenticeships and other learning workers to advance their skills and experience.

“More than 11,000 direct and indirect jobs are expected to be created over the construction period, with thousands more set to be supported once operations begin – meaning WSI really is a game-changer for employment in the region, opening new opportunities across a range of exciting fields.”

Federal Infrastructure, Transport, Regional Development and Local Government Minister Catherine King said:

“Today we are welcoming Qantas and Jetstar as the first airlines to sign up to the airport, which will provide much-needed aviation services and bolster this critical Australian industry – all while championing sustainable features and practices.

“From the terminal to the airfield, sustainability is a key focus in the design and construction of WSI, which will consume less electricity, water and liquid fuels than comparative airports.

“With this first landmark agreement in place, Sydney’s new airport continues to pass milestone after milestone, with start of operations just around the corner. Construction has reached the halfway point just months after being assigned the three-letter WSI international airport code.”