The Reserve Bank says there are signs house prices are easing.Credit:Glenn Hunt
He said the drop-off in house prices looked to have come to an end in a development that should encourage a lift in household spending.
The government's tax take had sharply increased in recent years but with the recent tax cut for low and middle income earners now working through the economy there should also be a little more money for families.
"Housing market conditions may even start to support consumption growth again in the period
ahead,"he said.
"Household disposable income growth is likely to be higher because of the direct effect of the
tax offset payments to low and middle income households,and also because we don't expect that tax payments will continue to significantly outpace income growth."
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Dr Debelle said there were signs the trade tensions between the US and China had affected global growth,particularly around manufacturing.