Australia has the capacity to borrow more

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St. George Banking Group and Bank of Melbourne

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.  

 

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Hans Kunnen, Chief Economist, St. George Economics,
St. George Banking Group and Bank of Melbourne 

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.

Media Enquiries:
Ron Smith, Corporate Media Communications, UDIA (VIC) Mobile: 0417 329 201