Assistant Treasurer Daniel Mulino has hit out at critics of the government’s housing tax changes, accusing them of exaggerating the property downturn.
Mulino’s comments to 7NEWS come as those looking to buy a home brace for another Reserve Bank decision on interest rates.
“Some of the commentary exaggerates what’s happened to date,” Mulino said.
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Yale educated with a PhD in economics, the assistant treasurer spoke with 7NEWS podcast The Issue about Australia’s property market storm in the five months since the government announced its housing tax changes.
“The tax distortions needed to be addressed in addition to building more houses,” he said.
However, industry data now suggests new home sales slumped 17.5 per cent in the September quarter.
Post-budget uncertainty and interest rates have been identified as key problems facing the market.
Australians are falling further behind, paying more on their mortgages as rates remain elevated.
Some economists argue inflation is climbing on the back of increased government spending.
“It’s gone up by two and a half percentage points. That’s an extraordinary expansion of spending,” UNSW economist Professor Richard Holden said.
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Mulino defended the government’s fiscal management, saying “we’ve found savings in every single budget”.
Professor Holden argues any government wanting to have an impact on inflation must now cut spending big time.
“They’re really in the territory of $100 billion a year worth of spending that they’d need to cut out,” he said.
The next inflation data is due late this month, with the Reserve Bank’s rates decision early next month.
The upward trend in both has put pressure on the government to the point where some question whether Treasurer Jim Chalmers should keep his job.
“I think he’s perfectly safe. And look, I think if you look at it objectively, he has carried through some big structural reforms,” Mulino said.
You can catch more of The Issue on Listnr or watch full episodes on our YouTube.
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