Stars and gripes over US loans



This American family's mortgage is one of the reasons you face a home loan rate rise - regardless of what the Reserve Bank does. To purchase their four-bedroom, 3«-bathroom custom-built home in Little Rock, Arkansas in the south of the US, Ron and Doris Smith were forced to go to a subprime mortgage lender.

These are the reckless organisations being blamed for the US housing crisis - record mortgage foreclosures, loan defaults, mortgage company collapses, and falling house prices. The ripple effect from the US crisis is causing a global credit crunch that has now hit Australian shores. At the end of the chain is the Seed family from Rockdale, in Sydney's south, who have taken every precaution to insulate themselves financially, but now face the prospect of further rate rises.

Australian mortgage lenders - including the Commonwealth Bank, which posted a record $4.47 billion annual profit - have said they could be forced to lift their variable rate by 0.25 per cent in coming months, regardless of the Reserve Bank of Australia's action on interest rates, because of the problems in America. The Commonwealth Bank has no direct exposure to the troubled US subprime sector but says the cost of lending money has risen. "The fact of the matter is the price of credit in the market internationally has risen, so there will, at some stage, be some increase in rates," Commonwealth chief executive Ralph Norris said. Australian lender RAMS Home Loans is one of the companies caught up in the US loans debacle and is warning of higher costs. The company sources almost half its funding for Australian home loans from the US market.

But in Little Rock, Mrs Smith said she was angered by the bad publicity and blame being heaped on US borrowers who are forced to go to subprime lenders when the banks refused to give them a loan. The banks would not lend to them two years ago because, Mrs Smith said, it was hard to calculate her husband's income. Mr Smith, 34, owns a removalist company and his wage fluctuates.

But in Rockdale, Commonwealth Bank customers Karyn and Mark Seed said they were working to ensure their home loan was paid off and could not be held responsible for the actions of mortgagees halfway around the world. "It's not our fault, what is happening in America; it shouldn't have anything to do with what is happening to us. We're in a totally different country," Mrs Seed said. "I've got two young children - I've still got to go out and work four or five days a week to help pay my mortgage."

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Axe Muslim immigration - Pauline



PAULINE Hanson says she will run on similar policies to those that won her international notoriety a decade ago when she vies for a Queensland Senate seat at the upcoming election. The main difference will be that this time the former fish and chip shop owner, who claims credit for forcing the Howard Government to adopt a harder line on immigration controls, will target Muslims.

"We need to have a look at our immigration levels and I'd like to have a look at putting a moratorium on any more Muslims coming into Australia," Ms Hanson said yesterday. As revealed in The Courier-Mail yesterday, the former One Nation leader has applied to the Australian Electoral Commission to register Pauline's United Australia Party. If successful, the party's abbreviated name, Pauline, will appear above the line on the Senate ballot paper, making it easier for people to vote for Ms Hanson.

The 53-year-old won the seat of Oxley as an Independent at the 1996 election after being expelled from the Liberal Party because of her explosive views on immigration. In her maiden speech, she warned against Asian immigration and went on to launch One Nation which eventually foundered, but not before it grabbed a swag of seats at the Queensland state election. She lost her own seat at the next federal election.

Ms Hanson said "nothing's changed" with her policies. "I think that we need to look at getting out of the 1951 convention of refugees, and not being forced into taking refugees in this country that bring in diseases, who are incompatible with our lifestyle," she told ABC Radio. She said tariffs should also be raised to protect local industry and manufacturing from "cheap imports".

Of Queensland's six Senate spots up for grabs at the election, five are held by the major parties, with the remaining seat held by Australian Democrats Senator Andrew Bartlett. Ms Hanson will be up against Senator Bartlett, the Greens' Larissa Waters and Family First's Jeff Buchanan for the required 14.5 per cent of the vote to gain a Queensland Senate seat.

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Labor party doing its usual self-destruct act: Internal bickering

One of Labor's most powerful factional bosses has rebuked party leader Kevin Rudd and ordered federal Labor candidates to back off in their confrontation with Queensland Premier Peter Beattie over council amalgamations in the state. Bill Ludwig, a leading union figure in Labor's Right faction, said Mr Rudd and some candidates had been wrong to conclude that the amalgamations could cost the party the federal election. The Queenslander, who is the Australian Workers Union national president and Labor national executive member, said federal Labor was becoming "spooked" over the issue.

New state legislation has slashed the number of councils to 72, but some Labor strategists are concerned that widespread community opposition to the amalgamations could cost the party key seats in the poll. John Howard has attempted to capitalise on the row by promising federal funding for plebiscites on amalgamation proposals on federal polling day. Mr Rudd supports Mr Howard's view that amalgamations should not proceed without local referendums.

But Mr Ludwig said he believed the issue would not cost Labor seats. "I don't think we're going to lose one vote over this. It's not worth worrying about. We will win government with or without this amalgamation business," he said. He said Labor had "allowed themselves to be spooked on council reforms by the National Party, for God's sake". "The National Party shouldn't be capable of spooking a pussy," he said.

But last night, Mr Rudd pledged to continue opposing the council plan. "Mr Beattie has got it wrong when it comes to compulsory amalgamations," Mr Rudd said. "Federal Labor will continue to campaign against them."

Mr Ludwig's intervention is likely to spark a renewed attack from the Coalition over the union movement's power within the ALP. But the controversy has also renewed tensions between Mr Rudd and Mr Ludwig. Both come from Queensland, but Mr Ludwig, arguably the most powerful factional figure in the state's Right, supported Kim Beazley for the leadership over Mr Rudd. At the time, Mr Ludwig said: "I've been bagging Rudd to anyone who will listen." Mr Rudd also stared down Mr Ludwig in December, after he became leader, when, over the union leader's objection, he secured Craig Emerson's elevation to the front bench.

Mr Ludwig said yesterday he had told his Right faction federal candidates in Queensland to "pull their heads in" and not to support Coalition attacks on Mr Beattie over the amalgamations. "I've sent the word out to the candidates. What the state Government has done is fair," he said. "There was an independent commission which looked at the issue. To have 156 councils in Queensland in 2007 is ridiculous."

However, the former Labor MP for the key marginal seat of Hinkler, Brian Courtice, said the amalgamations would hurt Labor at the poll. Mr Courtice said anti-amalgamation sentiment was so strong in some areas that it could cost Labor four seats: Hinkler, Flynn, Leichhardt and Petrie. "Polls show these seats are winnable, but Peter Beattie is guaranteeing they won't fall to Labor," he said. "It's not a question of a big anti-Labor swing. It's the capacity to stop Rudd from winning enough seats to get across the line."

Queensland Local Government Association president Paul Bell said 15 to 20 councils had resolved to hold ballots on amalgamation proposals. This could get them sacked for breaching the new legislation's ban on ballots. Mr Beattie said this week he regretted the timing of the amalgamations and any impact it might have on the poll, but would not back down.

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Left unable to face the challenge of black problems that it helped to create

INDIGENOUS Affairs Minister Mal Brough yesterday politicised the intervention in Northern Territory Aboriginal communities, arguing that Labor would never have stood up to the NT Labor Government. Mr Brough said the "sweeping", "breathtaking" and "bold" changes to fight child abuse in 73 of the Territory's indigenous communities would never have been made by a Labor government. "Would a Rudd-led Labor government have taken on Clare Martin, another Labor minister or chief minister, taken her on and said, 'You have failed the people of the Northern Territory?"' he asked.

In a speech to the National Press Club in Canberra, Mr Brough said seminal land rights moments, such as the stockmen's strike of the 1960s and even the High Court's 1992 Mabo native title decision, had impoverished Aborigines, not freed or empowered them.

Mr Brough promised to make sure that while the commonwealth would own the land in the 73 targeted communities for five years during the intervention, sacred sites would be respected. "I've heard that message and I will ensure that all of my managers on the ground ... will be given advice from elders about the significance of things in their communities and that they do not trample over significant issues unintentionally," he said.

He said the Mabo decision -- overturning terra nullius -- and the High Court's Wik judgment of 1996 -- which found native title was not extinguished by pastoral leases -- were very important, but building on the Land Rights Act of 1976 had locked indigenous people into collective tenure. "What got lost in the debate was people thought it was the holy grail, that releasing land would free people and empower people," he said. "It's done just the opposite. It's actually impoverished them. "We need to actually recognise that communism didn't work, collectivism didn't work. It doesn't work to say a collective owns it and you don't have anything."

Mr Brough responded to concerns that the Territory's National Emergency Response Bill offered communities "a reasonable amount" rather than the "just terms" compensation enshrined in the Constitution for the temporary lose of title to their land. Handing down on Monday a majority report on their day-long inquiry into the most dramatic shift in Aboriginal affairs since the 1967 referendum, the four Liberal and three Labor members of the Senate legal and constitutional affairs committee called on the Government to clarify as soon as possible the compensation issue. Mr Brough said yesterday the commonwealth's drafters had told him the legislation -- set to pass the Senate this week -- was drafted in line with the Constitution, but if he received sound advice to the contrary, he would heed it. "It is done in good faith. We've made it very clear, the Prime Minister and I, that this is about just terms and we will honour that. There is nothing to hide here," he said.

Mr Brough also said kava, as well as alcohol and pornography, would be outlawed in communities by the end of the week. Kava was introduced from the Pacific islands to Aboriginal communities in the early 1980s in the hope that it would curb alcohol abuse. Mr Brough brushed aside resistance to the ban on the intoxicating brew, illustrated by the ejection this week of a federal survey team by the Arnhem Land community of Yirrkala.

Rejecting Mr Brough's attack, Opposition indigenous affairs spokeswoman Jenny Macklin said federal Labor was absolutely determined to fight child abuse in Aboriginal communities. "All sides of politics have failed indigenous children. Nothing can be gained from blaming federal Labor or the states for what is everyone's failure," Ms Macklin said. She said federal Labor had moved amendments in the Senate this week to ensure that just-terms compensation was paid when the Government acquired an interest in land. "But the Howard Government refused to support our amendments, despite government senators raising concerns," she said.

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