I've been saying for some time that austerity measures are inevitable, they may start rolling them out in this budget, still watching with interest for the "policy leaks" that usually come in the months before a tough budget.
Its widely known in the industry that banks are dangerously exposed to the next downturn in property, but the RBA won't tighten monetary policy on house prices because growth or perceived growth in household wealth is finally getting people to spend. It matters not that it might correct down the track, right now the RBA need consumers spending.
The government and the RBA have to time this right, they know where house prices will inevitably end up, but for now its all about keeping money moving for as long as it still can. I personally don't think there is much more that can be done, the business cycle is overdue for a recession and this one is going to be a cracker.
