AI doom, nature laws and solving the housing problem: five takeaways from day two of economic reform roundtable
As proceedings wrapped up, Chalmers said 'there is a real prospect of a useful consensus emerging on a number of key reform areas.'
Here are five takeaways from Parliament House:
The government is optimistic about efforts to lower spending including on the National Disability Insurance Scheme and the age pension.
The social services minister, Tanya Plibersek, on Tuesday announced plans to end the freeze on the deeming rate used to calculate welfare payments. The freeze has cost the budget about $1.8bn. Plibersek said a phased return to pre-Covid settings is appropriate as inflation pain eases for households.
Separately, the health minister, Mark Butler, said the 8% growth target for the NDIS was 'simply unsustainable'. Currently growth is closer to 11%. Butler wants it lowered to 5 or 6%.
Butler is expected to join a session on efficient and high-quality government services, spending and care at the summit on Thursday.
While business leaders and experts talk up the potential of AI, Sally McManus, the ACTU's secretary, backed a worker-centric approach to rolling out the technology.
Danielle Wood, the Productivity Commission's chair, said AI could lift the average workers' income by $4,300 per year over the coming decade.
While acknowledging AI's potential, McManus said 'we shouldn't just say automatically we are all going to be better off because of AI - we've got to make sure we are'.
'It may boost productivity, it may also just boost profits.'
McManus said she wasn't advocating for 'over-regulating' AI.
But she said there was a 'doomer' view of the technology that comes with the fear of a 'Trump-billionaire, let-it-rip' approach. 'People have got to trust AI to deliver good outcomes. You are going to get better outcomes if you involve people in the use of it.'
A discussion on better regulation and approvals involved the environment minister, Murray Watt, who is in charge of the rewrite of the Howard-era Environment Protection and Biodiversity Conservation Act (EPBC).
Kelly O'Shanassy, the Australian Conservation Foundation chief, said increased productivity was meaningless if the planet is overheated and natural environment is lost.
O'Shanassy has welcomed signs of consensus the establishment of areas for critical developments like housing and renewable energy. However, there was no consensus on the powers of the planned independent environment protection agency. Business has pushed for the federal government to retain approval powers.
'We went into the room a bit worried that people would have a knee jerk reaction of 'just get rid of the EPBC Act', or 'just devolve all the responsibilities to the states' or 'fast track environmental approvals for renewables and housing',' O'Shanassy said.
'None of that was the reality. I think there was support for better, smarter regulation that has increased protections for nature.'
With most in agreement that we need to make it easier to build homes, Daniel Mookhey, the New South Wales treasurer, and the Business Council of Australia's chief executive, Bran Black, voiced strong support for a temporary freeze of the national construction code.
Mookhey, speaking on the sidelines of the roundtable, said a pause in adding new federal regulations would 'certainly' lead to more homes being built.
'If the national code is frozen it gives us a bit more time to get the interactions between national standards and state standards clear and sorted. But equally, it will give a lot of confidence to people who are looking to build right now.'
Black was more circumspect on whether there was widespread support for pausing the NCC, saying 'there isn't agreement on that within the room'.
The Australian Council of Social Service boss Cassandra Goldie told the meeting a freeze might be bad for vulnerable people and flexibility was required to improve the standards of housing, including in the rental market.
Meanwhile, the former industry minister Ed Husic said he was concerned about the proposed pause to the code.
Husic said the former Coalition government had frozen new homebuilding regulations, only to rush through a mass of changes in a short period of time. 'People who've lived in older homes with regulations that weren't as strong understand why livability is such an issue.'
The Productivity Commission's Danielle Wood reminded attendees that 'it's productivity that drives improvements in living standards'.
Average productivity growth in the decade to 2014 had slumped to a 60-year low of 0.4%, she said.
According to slides obtained by Guardian Australia, she blamed the slowdown on the waning boost from technology, low rates of business investment, a less dynamic economy, and a disinterest in pro-growth policy reforms.
The shift to more labour-intensive services industries, such as the care sector, has also played its part in the productivity decline.
The PC boss then ran through the commission's 'five pillar' interim reports. She highlighted smarter regulation is needed for approvals for building homes and green energy projects.
'Australia needs 10,000kms of new transmission lines and a six-fold increase in grid-scale renewable energy to reach net zero by 2050,' her presentation slides noted.
But the average time for a decision under the EPBC for clean energy projects was over 500 days, while 45 projects from 2018 to 2022 still had no decision by November 2024.
It was a similar story in housing, where Wood said actual building is a small fraction of the time it takes to build a home. 'An apartment complex that takes seven to 10 years to develop can be built in one to two years.'
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