Steve Keen's Debtwatch

To its cred­it, the House of Rep­re­sen­ta­tives Stand­ing Com­mit­tee on Eco­nom­ics, Finance and Pub­lic Admin­is­tra­tion decid­ed to hold an “Inquiry into home loan lend­ing prac­tices and process­es”, in the form of a one-day round-table dis­cus­sion with inter­est­ed par­ties.

They invit­ed a diverse group: all the major banks were asked, as well as rep­re­sen­ta­tive of non-bank lenders, mort­gage insur­ers, val­uers, com­mu­ni­ty rep­re­sen­ta­tives, reg­u­la­tors, and yours tru­ly. We were asked to con­sid­er four top­ics:

• To what extent have cred­it stan­dards declined in Aus­tralia in recent years?
• Have declin­ing cred­it stan­dards caused an increase in the num­ber of loans in arrears and the num­ber of repos­ses­sions?

It’s not yet the main top­ic of debate between Lib­er­al and Labor, but some of the argu­ments in Debt­watch have at least made their way into Hansard cour­tesy of a speech by Lau­rie Fer­gu­son. The full extract from the speech is shown below.

“This makes a mock­ery of the claim by the Prime Min­is­ter that we have nev­er been bet­ter off. Whilst the Howard gov­ern­ment crows about the suc­cess in the econ­o­my, which was large­ly inher­it­ed from Labor and fuelled by the raw mate­ri­als demands of India and Chi­na, there is an alter­na­tive real­i­ty of an out-of-con­trol per­son­al debt spi­ral. Steve Keen from the Uni­ver­si­ty of West­ern Syd­ney writes: