National Accounts data is a warning bell that must be heeded

The National Accounts data released today has highlighted the urgency in pursuing economic reforms that drive investment and construction.

The ABS media release highlights what is happening across the property industry:

Private investment in new buildings detracted 0.3 percentage points from GDP growth.

“The reduced building activity is reflected in the output of the construction industry which fell 3.6 per cent for the quarter and was the largest contributor to the fall in GDP growth on an industry basis.

“Subdued activity in the building industry contributed to a decline in the income of small businesses, with gross mixed income down 5.8 per cent.”

“Today’s result is concerning given that interest rates are at historic lows. This is a warning bell that must be heeded”, said Ken Morrison, Chief Executive of the Property Council of Australia.

“In recent years, the property industry has been a vital part of helping Australia transition from a mining led economy. We have passed the top of the construction cycle and it is imperative that we see reforms that will underpin the construction cycle.

“The facts speak for themselves – Australia has negative growth, rising deficits and sluggish productivity. It is time for federal, state and territory governments to focus again on economic reform.

“While the return of the Australian Building and Construction Commission is a vital reform which will lift productivity across the sector in coming years, other policy imperatives have been left to languish.

“We cannot ignore the nexus between investment, taxes and jobs. State governments have persisted with new foreign investment taxes, the Federal Opposition persists with a negative gearing policy designed to put the brakes on the property industry and the Federal Government is yet to actively support reform of state planning systems through funding national competition payments. 

“For all the uninformed talk of property bubbles, we are seeing a consequence of taking the economic prospects of a vital sector for granted.

“Last Friday, federal, state and territory treasurers gathered to debate reforms that could address housing affordability and accelerate construction and today we saw the economic imperative for doing so.”

Media contact:  Paul Ritchie |  E pritchie@propertycouncil.com.au