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Any significant spending commitments from the coalition could force up interest rates and inflation, when combined with the latest tax cuts announcement, a housing industry economist says.
The Government on Monday announced a five-year package delivering A$34 billion ($40.6 billion) worth of tax cuts over three years.
The Housing Industry Association said the tax cuts were affordable.
"I think it's a welcome move to be providing some further tax relief for a broad range of households and of course these tax cuts will encourage more people into the workforce.
"So, in that sense, that will have perhaps some constraining effect on wages growth going forward," association chief economist Harley Dale told ABC TV. But Dale said the Government had to be careful when making spending promises.
"What we don't want to see is a raft of spending commitments being made by both sides of politics that, put together with these tax cuts, would run the risk of significantly fuelling inflation and adding to pressure for higher interest rates."
Dale said the tax cuts would have a minimal effect on the property market.
"It could potentially free up some rental property that at the moment might be being chased by, say, aspiring first home buyers and rental investors looking after the same target properties. But it really wouldn't make any difference to that really burning need for new investment.
" AAP
