Increase in building approvals welcomed Tue 31 July 2012 David O'Byrne Minister for Economic Development The Minister for Economic Development, David O'Byrne, today welcomed an increase in residential building approvals of 9.2 per cent in seasonally adjusted terms. Mr O'Byrne acknowledged that new housing construction remained weak in trend terms but said there were encouraging signs that the market was stabilising. "Conditions in the residential building industry have been challenging for some time now so it is encouraging to see an increase in approvals last month," Mr O'Byrne said. "There is evidence that lower interest rates and housing prices are beginning to have a positive effect on the housing industry including: • Monthly Hobart House prices up 3.2% in June 2012, the strongest rise in the country. • ANZ analysis of ABS housing finance data showed that new home buyers spiked a massive 29 per cent in May, the highest increase in the country. • Overall housing finance increased by 8.6 per cent in seasonally adjusted terms, while the value of loans leapt by 12.3 per cent • Building approvals up 9.2% in seasonal terms for June 2012, compared to a 2.5% decline nationally. Mr O'Byrne also highlighted new analysis released by the Victorian Government which warned against fighting structural change. "This report, authored by Delloite and commissioned by the Victorian Liberal Government, reinforces the need to adapt to structural change rather than unsuccessfully trying to fight it solely with costly state-based stimulus measures as the Tasmanian Opposition is proposing." The report states: "An increase in spending may simply divert resources from their previous uses into new, government funded, uses that are not sustainable and would be more costly than a targeted approach focused on removing barriers to structural adjustment." It notes that while national stimulus programs can be highly effective, measures pursued in isolation by individual states can be counter-productive. "This completely puts lie to Will Hodgman's claim that Tasmania's challenges can be addressed with a few slogans and silver bullets," Mr O'Byrne said. "Mr Hodgman has already poached the Victorian Liberal Government's fiscal strategy, he would do well to listen to their advice on state-based stimulus measures." Mr O'Byrne said in contrast to the band-aids proposed by the Liberal Opposition, the Tasmanian Government was responding to structural change. "Tasmania must diversify its economic base and that is what our Economic Development Plan is achieving," Mr O'Byrne said. "We are also driving reform in the energy sector which has delivered immediate price relief to all users and is laying the ground work for the introduction of competition for households and small businesses."