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Thursday, 25 October 2018
Page: 11180

Economy


Ms FLINT (Boothby) (14:27): My question is to the Treasurer. Will the Treasurer update the House on measures the government is taking to protect Australia's AAA credit rating and manage the nation's finances? How would a reckless approach to managing the budget put the AAA credit rating at risk?


Mr FRYDENBERG (KooyongThe Treasurer) (14:27): I thank the member for Boothby for her question because she, like all members on this side of the House, is working hard to grow the Australian economy, an economy that is growing at 3.4 per cent through the year, its fastest rate since the height of the mining boom, an economy where we've seen more than 1.1 million new jobs being created, an economy where our budget is on track to come back to balance a year earlier than expected. And today we heard from Fitch, one of the leading credit-rating agencies in the world, reaffirming our AAA credit rating.

What they said in their report was that they praised the government for its sustained spending restraint, for its budget repair strategy, and forecast that we would return to surplus as expected. But Fitch also had some words to say about the housing market. While they said that there is now an orderly transition, they did warn of a sharp decline. What would cause a sharp decline? A larger pull-back from investor demand. What have Standard & Poor's said? Very similar—

Ms Ryan interjecting

The SPEAKER: The Treasurer will just pause. The member for Lalor will leave under 94(a).

The member for Lalor then left the chamber.

Mr FRYDENBERG: Standard & Poor's have said a similar thing: Australia's AAA rating could come under pressure if house prices fall sharply. That would increase risks to fiscal accounts, to real economic growth and to financial stability.

What is going to lead to a sharp decline in house prices? It's Labor's property tax. It's Labor's changes to negative gearing and capital gains. Under Labor's new property tax, if you own your home, it will be worth less. Under Labor's new property tax, if you rent your home, you'll be paying more. Under Labor, you'll always pay more and the value of your house will be lower.

These reckless taxes from the Labor Party are putting in danger our AAA credit rating. If we were to lose our AAA credit rating, our cost of borrowing would be higher, the states' cost of borrowing would be higher and Australians would be paying more for everyday costs across the economy.

The member for McMahon has said just in the last couple of days, 'This is exactly the right time to reduce negative gearing.' That's what he said. But what we're hearing from the experts—the Master Builders association, RiskWise, Citigroup, Fitch, Standard & Poor's—is: 'Don't risk the housing market. Don't risk the property market.' Only the coalition can be trusted to keep the value in your home and trusted to keep your rents lower.