Tax cuts to pass. Next: infrastructure spending.
Matthias Cormann will no doubt avoid repeating the cigar-fueled rookie mistakes of celebrations past today, but celebrate the government will. As of last night, Tasmanian senator Jacqui Lambie confirmed her support for the government's $158 billion income tax cut plan, which means it has the numbers to pass the Senate when it meets to debate the package tonight.
So naturally, the focus is now on what else the government needs to do to stimulate economic growth. Former federal opposition leader, John "Birthday Cake" Hewson was calling in to talkback radio this morning, spruiking the creation of a new Australian infrastructure bond to fund a fresh round of spending.
He followed a collection of business, state government and other politico types today calling on Scott Morrison to bring major infrastructure projects forward, including spending on existing infrastructure as well as new road projects. It's this sort of activity that Reserve Bank governor, Philip Lowe has been referring to over the past six weeks when calling on government to step up on stimulating the economy.
We may be more confident, but the skies are still pretty cloudy.
The latest ANZ / Property Council Survey results for mid-May to mid-June were released yesterday. It showed industry confidence is growing for the first time in more than a year - a factor also being reflected in improving auction clearance rates. While acknowledging credit availability is a big part of the improvement in sentiment, the authors reflected broader consensus that the property sector has a long, bumpy road ahead of it yet.
ABS construction approval data was also released yesterday, showing a 0.7 per cent bump in May led by a 14.4 per cent increase in Victoria. NSW approvals were flat and all other states dropped over the same period.
Not to be outdone, the HIA also released a report yesterday showing the states lost $2.4 billion in reduced stamp duty revenue during the 18/19 financial year, due to the sustained fall in property prices. With pundits predicting a slow burn on the recovery of house prices, it'll be a long time before these stamp duty revenue numbers return to strength.
Government calls on APRA to ease up and let the river of credit flow again.
Assistant Treasurer Michael Sukkar is contradicting his government's habit of recent times, calling on the financial services regulator, APRA to go easy on the banks. He's asking APRA to review its restrictions on bank lending to "get credit flowing" to home borrowers.
As REA's Nerida Conisbee points out this morning, there won't be any lift in housing prices if the banks don't lend. Ms Conisbee is arguing that if we want Sydney in particular to be more affordable, we need increased supply. This means more building, beyond the excess resulting from the recent development boom, and for banks to step up its lending to businesses and consumers to make that happen.
There's a chart in this article showing how the major banks responded to Tuesday's RBA cut, and illustrating how some of the cheapest home loans available today are from smaller lenders.
Mirvac may be giving them a call. It's fallen nearly $30 million short of its target of raising another $75 million through a share purchase plan by this week's deadline.
Sunland Group has a bit of cash in its pockets after securing $20 million by offloading Lakeview Retail Centre, part of its Gold Coast masterplanned community, The Lakes. Maybe it could do Australia's auto salesmen a favour and buy a few utes; new car sales fell another 9.6 per cent in June, making it 15 consecutive months of declines for the vehicle market.