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Government threatens increase in building approvals

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Media Release G e o ff P rosser M.P. FEDERAL MEMBER FOR FORREST

Shadow Minister for Small Business, Housing and Customs.

91 .

4 May 1992

Government Threatens Increase in Building Approvals

The 6.9% increase in building approvals in March suggests that the January cut in interest rates has flowed through to the housing sector.

However, it is important that this increase in activity is maintained and tomorrow's expected 1 % cut in interest rates will go some way toward ensuring this.

It is cause for concern that the increase in building approvals has largely been at the expense of builders' profits. Builders have had to cut their margins to the bone just to stay in business, and while many of them are now working, very few are making any money.

It is also of concern that the recent monthly increases in building approvals have not flowed through to any of the industries dependent on the housing sector.

The furniture manufacturing industry, for example, has not seen any sign of a pick-up. Indeed, in recent discussions many indicated that the down-turn in their industry had not yet bottomed.

Importantly, the potential for a recovery in the housing sector is under jeopardy because of the Government's proposals to bring sub-contractors into the Industrial Relations systems and secondly, to introduce a superannuation guarantee levy.

If the Government pushes ahead with its plans, it will add at least $15,000 to the price of a new home, decimating the housing industry and plunging it into the depths of the worst recession it has ever known.

ends Canberra