Australia has been warned ballooning house prices in Sydney and Melbourne could harm the so-called "lifestyle dividend" which attracts foreign capital and talent.
That’s one of the concerns raised in a new report by the United States Studies Centre on the Australia-US investment relationship.
“It’s really important we don’t rest on our laurels about our so-called lifestyle dividend,” author Richard Holden said at the launch of the report in Canberra on Monday.
“Australia is a great place to live as we all know, but we need to make sure it continues to be a great place to live so companies can attract the very best people.”
Housing affordability and fixing infrastructure bottle necks were important factors in attracting investment and skilled migrants, Professor Holden said.
Much to the delight of Treasurer Scott Morrison, the academic also made the case for making Australia’s company tax rates and personal tax rates more competitive.
The federal government earlier in the year passed laws which lowered the company tax rate from 30 per cent to 27.5 per cent for businesses earning up to $50 million over the next three years.
The government is yet to muster enough support for the second part of its plan, applying the lower tax rate to companies with a turnover of more than $50 million.
Mr Morrison emphasised Australia’s economic relationship with the US was equal to its strong strategic security ties.
The US is Australia’s largest foreign investor with stock worth $195 billion that helps sustain 330,000 high-paying jobs with average salaries of more than $115,00.
“This is a relationship that is producing more and better-paid jobs,” the treasurer said.
America is also the largest destination for Australian outbound investment.
Total cumulative Australian investment in the US is estimated to be $617 billion more than seven times more than investment in China.