Joe Hockey is quite optimistic about the outlook for the Australian economy, provided the federal government is allowed to get on with its reform program.
The treasurer told a business conference the G20 was close to putting together the measures needed to lift world growth by an additional two per cent over the next two years.
“I’m quite bullish about the Australian economy,” he told the Bloomberg-hosted conference in Sydney on Tuesday.
“As the world speeds up, we’ll speed up, provided that we continue with our reform program.”
But if Australia gave up reforming competition law, tax, welfare and a range of other areas, it would ultimately lead to a lower quality of life.
The G20’s growth target was a historic Australian initiative agreed at a meeting of finance ministers and central bankers in February under the stewardship of Mr Hockey.
He and Reserve Bank governor Glenn Stevens will again co-host their counterparts at a two-day meeting in Cairns this weekend.
But Mr Hockey rejected as “lazy analysis” claims the domestic housing market was in a credit-fuelled bubble that risked crashing, describing it as an “easy mantra” for international commentators and analysts based overseas.
He conceded there was a lot of money going into property, especially foreign investment in new dwellings, and that may well continue for some time as the Australian dollar decreases in value.
He urged state governments to do some of the “heavy lifting” in increasing housing supply.
However, the rise in house prices has not gone unnoticed by the RBA.
In the minutes of its September 2 board meeting, released on Tuesday, it notes credit growth for investor housing is running about 10 per cent a year and prices continue to increase in larger cities.
“Members considered that the risks associated with this trend warranted ongoing close observation,” it says.
In the meantime, the board considers a period of stability in interest rates as the most “prudent” course of action.
The cash rate has been stuck at a record low 2.5 per cent since August 2013.
However, such stability failed to stop consumer confidence easing 1.8 per cent in the past week to a five-week low, the latest ANZ-Roy Morgan survey found.