Despite the Australian government pledge of over $50 billion in stimulus policies since the global economic crisis hit our shores some brokers feel that more could have been done.
Of the 596 respondents to the latest weekly Mortgage Business straw poll last week only 32 per cent of respondents felt that the government’s response to the international crisis so far had been been good.
At 57 per cent, over half felt the government’s reaction was bad while 11 per cent were unsure.
Since October last year, the federal government has announced two stimulus packages, including substantial consumer pay-outs and the beefed-up first home buyer scheme to stimulate the housing market.
While brokers have welcomed the government’s speedy reaction to the slowdown some feel the policies could have been better thought out.
Mark O’Reilly of Choice Home Loans in Queensland commended the government on its decisive action but believes tax cuts for small businesses and PAYGs should have been included in the stimulus package.
“The economy is a mess, but at least they are trying,” Mr O’Reilly said.
Rising unemployment is also a growing concern and some believe that more should be done to tackle the problem. John McMahon of McMahon Financial Services told Mortgage Business that the government should have focused more on local infrastructure investment and job creation.
“Yes some of the stimulus payments will fuel the economy but this money could have been better distributed,” he said.
While the first home owner grant was keeping the mortgage and property industries going, Mr McMahon said the government needed to address the nations’ underlying property problem – undersupply.
“The government should be fostering building activity and providing developers with more incentives to build,” he said.
Mr McMahon also voiced concerns that the benefits of the government’s bank guarantee could go offshore, referring to NAB and ANZ’s plans to acquire foreign businesses.
“The government guarantees should have included a requirement to be utilised locally,” he said.
Nicholas Gruen, economist and CEO of Peach Home Loans, said considering the circumstances the vigour and speed of the government’s response had been good.
“... To have done as much as they have, to have acted as quickly as they have has been very good,” he said.
Dr Gruen said further monetary policy easing would be beneficial in stimulating the economy further and said borrower activity could boost the economy if banks lowered home loan rates in line with lower interest rates.
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