Macro-prudential policy can assist in containing the growing risk to financial stability as the current housing market reaches new extremes. In light of the growing risk, the Reserve Bank is closely considering measures that could be progressed in the coming months. References Cox, W and Pavletich, H. ‘12th Annual Demographia International Housing Affordability Survey.
The negative performance of the public finances reflects the slow growth of the economy together with difficulties in implementing some of the planned budgetary measures. Owing in part to the lapsing of one-off measures, net borrowing in 2006 will be equal to about 5 per cent of GDP in the absence of corrective action; the primary surplus will fall to nil.