Treasurer Scott Morrison has spoken to Australian Financial Review while in the US, and said financial regulators may ease back on home lending restrictions.
The lending restrictions have been so far effective in slowing down booming property growth, but Mr Morrison has indicated they may looked at if property values fall sharply.
The Treasurer described the restrictions on banks as completely ‘malleable’ and said he was meeting regularly with the Australian Prudential Regulation Authority and the Reserve Bank.
“The great thing about these macro-prudential controls, as opposed to structural change to your tax system, is that they are completely malleable,” he told AFR.
“You can target them, you can fine tune, you can pull them back, you can push them forward, you can watch them all the time.”
With Melbourne’s property market looking to have finally started to run out of steam and Sydney going backwards, it reduces the need for regulators to clamp down on lending to slow the market.
Some of the APRA measures that might be dialled back include limits to the flow of interest-only lending to new mortgage loans, annual growth caps on investor loans and tighter equity requirements.
Mr Morrison criticised Labor’s alternative plan to axe negative gearing for future purchases of existing housing stock and to reduce capital gains tax concessions.
“You change the tax system structurally through a Parliament, you know, you’re burning your bridges,” he said.
“And if it goes bad, and I think the risks are there, I’ve articulated them, no coming back from that.”