"Australia
has the capacity to borrow more while keeping its debt-to-GDP ratio at low levels
and thus maintain its AAA credit rating," Hans Kunnen, Chief
Economist, St. George Banking Group.
One
of Australia's leading economists today said the fear of lower credit ratings
by Government is holding back development and job creation.
Hans Kunnen, Chief
Economist, St. George Economics, St. George Banking Group and Bank of Melbourne,
speaking at the Urban Development Institute of Australia, Victoria's monthly lunch,
told the audience with interest rates at historic lows State governments are reticent
to borrow for fear of lower credit ratings.
Mr Kunnen said, "Australia has the capacity to borrow
more while keeping its debt-to-GDP ratio at low levels and thus maintain its AAA
credit rating".
"This year should see
less global chaos, more hard work for Australia and better outcomes.
Interest rates are low, global fears have abated and consumer confidence has picked
up".
"House prices appear
to have stabilised, our population is rising and our superannuation savings are
being rebuilt."
"Australia
is entering its 22nd consecutive year of economic growth."
Mr Kunnen said to continue
moving forward, something needs to fill the potential gap in our investment make-up.
"By all accounts, investment in
the resources sector is set to slow. Its place needs to taken by investment in
infrastructure, business investment, housing and commercial construction.
Are we doing all we can to make that happen?"
"The provision of infrastructure
to support ongoing growth in Victoria and across the nation appears at an impasse.
The limited sources of income open to the States no longer appears sufficient
to provide what is required".
"Maybe it's time for
the Federal Government, with its broad sources of income and strong credit rating,
to step up to the plate and make funds available," Mr Kunnen said.
Ron Smith, Corporate
Media Communications, UDIA (VIC) - Mobile: 0417 329 201
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