After claiming election victory on Sunday, the Turnbull government has been warned that a strong national focus on housing is critical to retaining Australia’s AAA credit rating.
Harley Dale, chief economist at the Housing Industry Association, said that while residential building activity has been the engine room of the Australian economy for the past four years, there’s much more that needs to be done if the nation is to defend its top credit rating.
“The incoming Commonwealth government needs to focus on building the new homes for our growing population, meeting the housing needs of our changing demographics, addressing the housing affordability challenges confronting younger generations, supporting the 321,595 businesses that operate across the residential building industry, and importantly, enabling the industry to grow and expand its contribution to the Australian economy,” he said.
“Australia needs a commonwealth housing minister – a senior minister in cabinet to provide national leadership, to coordinate federal, state and local government housing programs, to guide important industry policy reform nationally, and ensure housing has a front seat in cabinet discussions around taxation reform, national budget repair, infrastructure and workforce development.”
Mr Dale said external ratings agencies and organisations like the International Monetary Fund are watching Australia’s economy closely – in particular, the nation’s housing sector – and that a lack of federal focus on housing policy reform increases the chance of a ratings downgrade.
“Reform is the key, while procrastination could well be the nation’s Achilles heel,” he said.