National Accounts highlight need for fundamental reforms

“The latest National Accounts, released by the ABS earlier today, show residential dwelling investment continues to play an important role in supporting economic growth across the economy, adding 0.37 points to GDP growth in 2016 and providing a partial buffer against the fall-out in non-dwelling investment, which has fallen for eight straight quarters.  But the latest quarter results show emerging weakness in the dwelling investment statistics,” Master Builders Australia’s National Housing Manager, Matthew Pollock, said.

“Dwelling investment contracted by 8.3 per cent in the September quarter, while the worst building approvals data in several years in October suggests dwelling investment is likely to fall further over the next few months, removing a key growth driver of the Australian economy of the past couple years,” he said.

“The construction industry grew by 1.2 per cent over the year-to September 2016, slipstreaming mining to taking the podium as the second largest industry in Australia, behind finance,” Matthew Pollock said.

“Overall, the economy contracted during the September quarter 2016, recording negative growth of 0.5 per cent, driven by an ongoing deterioration in private business investment, weakening retail sales and housing construction,” he said.

“Total private investment remains heavily depressed, falling by 0.8 per cent during the quarter and slipping further to a share of 19 per cent of GDP, the lowest share in over a decade. The ongoing deterioration in private business investment is a risk to Australia’s 25 year run of uninterrupted economic growth,” Matthew Pollock said.

“The negative GDP results highlight the urgent need for reform that encourages private sector business investment and for the Senate to pass the government’s proposed cuts to company tax, and other much needed Budget reforms measures,” he said.

“Master Builders supports the Turnbull Government’s agenda to promote productivity enhancing reforms as noted in the Harper Review of Competition Policy in Australia, including recommendations to improve efficiency in the housing market by removing regulatory impediments to the supply of new homes,” Matthew Pollock said.