Interest rate cut a boost for builders, but productivity reform must follow

An interest rate cut announced today delivers welcome relief for the building and construction industry, home builders and renovators, and Australians struggling with high mortgages and rents.

Master Builders Australia CEO Denita Wawn said building and construction businesses need lower interest rates to help reduce the cost of doing business, while lifting demand in the market.

“Over the past several months, we’ve heard from builders that consumers are still reluctant to pursue new home building. Hopefully, today’s announcement gives them a bit more reassurance.

“The monetary policy settings have achieved their objective of lowering inflation, now we need to look at the industry’s capacity to respond to higher demand and get consumers the best bang for buck.

“The Reserve Bank has made clear that weak productivity growth is an area of concern and could keep interest rates higher for longer.

“Unless we address the productivity challenge in building and construction, the cost of borrowing will continue to weigh on businesses and households.

“The industry’s ability to build is constrained by declining productivity including labour shortages, stifling red tape, and poor planning systems.

“These make it more costly and less speedy to roll out new homes and other vital projects, limiting our ability to translate higher demand into increased building output.

“With the Economic Reform Roundtable just days away, building and construction industry productivity must be front and centre of discussions, as it is in the national interest to ensure we can deliver the housing and infrastructure Australia needs.

“Boosting productivity is essential to building a better, safer and fairer industry. It helps deliver quality outcomes, improves safety standards and keeps costs down,” Ms Wawn concluded.

Media contact: Dee Zegarac, National Director, External Affairs & Engagement
0400 493 071 | dee.zegarac@masterbuilders.com.au