TREASURER CONCEDES A SLOW RECOVERY
Written on the 4 February 2010
HOUSING demand will be strong towards the end of the year despite a sluggish construction market as the Queensland economy recovers, according to State Treasurer Andrew Fraser.
Speaking at an economic breakfast this morning at the Broncos Leagues Club, Fraser delivered a predictable ‘cautious optimism’ speech.
Even a growth rate of 2.7 per cent is well below what we have become accustomed to.
“The challenge for all of us in business and this government in 2010 is to be fundamentally optimistic, to understand our place in the world, be confident about that, but like always to do that in a cautionary and informed way to make sure that our decisions focus on the long term and not the short term,” says Fraser.
The comments follow a recent CommSec State of the States report that indicates the Sunshine State will have slower than expected growth this year and is the second worst performing state in the country.
The Treasurer’s focus was more on Queensland’s place in the world economy than outright economic indicators, downplaying China and commodities - given they both only make up 10 per cent of trade and the economy respectively.
On the other hand, he emphasised the role of our largest trading partner Japan and the preparation required for the effects of an ageing population.
One prediction he did make was about the construction and housing market, forecasting a lower and slower year for both, followed by a pick up in housing demand in late 2010 due to the first home buyers grant and the abolition of stamp duty.
“You can’t have all those things, along with continued population growth, you can’t put all of that into a pot, put the lid on it and not expect it to boil, so certainly our view is that housing demand will come back and come back strong towards the end of 2010,” says Fraser.
Housing construction, jobs and population growth were all down in Queensland compared to the other states, some of which had been better insulated from the effects of the global financial crisis by rising populations and mining (WA), according to the CommSec report.
New dwelling construction and housing finance pushed the Sunshine State to seventh and fourth positions respectively. But it improved a few spots in retail trade and business investment rating second and sixth in unemployment.
Fraser says the biggest challenges facing small business will be tax reform and environmental policy, with the analogy that its effects on energy will be similar to what water efficiency incentives did for water usage.
“The biggest challenges however in 2010 for small business I think are going to be around tax reform. That going to be a big debate that’s going to be had through 2010 and it’s about time they have it – next, the big challenge is going to be where climate change policy goes,” he says.
“But there’s no other place you’d rather be right now other than Australia.”
Australian Bureau of Statistics figures show Queensland continues to have the highest unemployment rate in the country at 5.94 per cent (seasonally adjusted).