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Budget reveals population growth as biggest constraint on economy

The property industry has commended the Federal Government on the continued strong management of Australia’s remarkable economic recovery, but flagged that population growth was clearly the biggest constraint on recovery.

Property Council of Australia chief executive, Ken Morrison, says the Government’s sensible approach of targeted support measures will continue to stabilise the economy and boost industry confidence.

“The Government has overseen a remarkable economic rebound, but the budget papers reveal that population growth will quickly become an anchor for our economy,” Mr Morrison said.

“Growth in GDP, employment and dwelling investment all shift down gears dramatically as the reality of negative net overseas migration takes over.”

“If borders need to stay closed based on health advice, Australia should avoid getting stuck in a binary choice of opened or closed borders and instead upscale our quarantine capacity.”

“Upscaling our quarantine and border processing capacity, and exploring other measures like fast-tracked pre-travel testing, will enable us to drive growth while staying safe.”

“Who should build and fund the additional quarantine facilities is a question for National Cabinet, but what the Budget makes clear is that Australia cannot afford to wait until this problem hopefully sorts itself out at the end of 2022.”

“We encourage the Government to begin this important work to reopen our borders to the rest of the world in a COVIDsafe way.”

Strong budget support will help property continue to lead the recovery

The Property Council also welcomed new measures contained in the Federal Budget to support short-term growth.

“Economic growth is forecast to continue to grow over the next financial year and this is welcome news for industry confidence,” Mr Morrison said.

“The Budget provides a new range of measures to reinforce our recovery, including new home ownership support, tax cuts, additional infrastructure investment, and new incentives to attract global talent.”

“These new initiatives build off a year of support and stimulus measures which have enabled the property industry to lead Australia’s recovery from the global pandemic.”

“New and extended homeowner support measures are targeted to help first home buyers bridge the deposit gap and bring the aspiration of home ownership within reach of a broader range of Australians.”

“The infrastructure projects identified in this announcement have been assessed by Infrastructure Australia as critical to Australia’s long term economic recovery from the COVID-19 pandemic.”

Budget reveals population growth constraints

The Property Council has warned of the long-term economic consequences of idling population growth.

Budget assumptions anticipate that Australia’s population growth will be limited to only 0.2 per cent over in the next financial year. Net overseas migration is forecast at -77,000 in 2021/22, with a return to normal levels of migration not expected until 2024/25.

“The Budget has revealed that our restricted border is the biggest constraint on our economy,” Mr Morrison said.

“Our lack of growth is going to catch up with us with economic and employment growth expectations slowing over the forward estimates.”

“Population growth is not an optional extra for Australia’s economy. Without it we cannot sustain our economic success over the long term.”

“If safe immigration is not resumed until well into 2022, Australia risks losing ground to our competitors as students and high value workers take other opportunities.”

Source: Property Council of Australia