Building transport infrastructure in major cities is the best way to boost growth and making housing more affordable, the head of the Reserve Bank of Australia says.
Governor Philip Lowe has told a parliamentary economics committee that with interest rates so low it would be better to create new urban transport infrastructure assets than try to boost household consumption.
He said with a growing population, crowded cities, poor land supply and difficulties people encounter moving around, investment in urban transport infrastructure would be "a first order gain".
"It increases demand, takes the pressure off ultra-low interest rates, increases the productive capacity of the economy because people can move around, it takes the pressure off housing prices," Dr Lowe.
"It's probably the best housing affordability policy."
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