Why the RBA held rates
But while the Government has been at pains to stress the RBA makes decisions independently, with global instability continuing, is this a sign there are more rough economic waters ahead of us?
Patricia Karvelas and Tom Crowley break it all down on Politics Now.
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ABC News
2 hours ago
- ABC News
Bigger properties occupied by smaller households in major housing mismatch, Cotality finds
In a reminder of how broken housing affordability and access is, new analysis highlights a major mismatch between the size of Australian homes and the number of people living in them. While the vast bulk of Australian housing is built for larger families, property research firm Cotality has found more than 60 per cent of households are made up of just one or two people. It reveals a misalignment between "who lives in our homes and the kinds of homes we're building", Cotality's head of head of Australian research Eliza Owen said in the report. "Of the lone-person households in Australia, the data suggests around 40 per cent are aged 65 and over," Ms Owen said. "The highest share of households is two people, but the highest share of housing has three bedrooms. "While there's nothing wrong with more bedrooms than people in a dwelling, there could be some inefficiencies in the way housing is being allocated," Ms Owen said. "After all, a 'traditional' family of four may have more need for a three-bedroom dwelling than a household of two people." The report cited data from the 2021 Census, which showed there were more two-person family households in three-bedroom dwellings (about 1.3 million), than three or four-person family households (about 1.1 million). Ms Owen has suggested a way to fix the "efficiency question", which she knows is not politically appealing — send a price signal. "Governments could make it more expensive to have more housing than you need, and cheaper to live in smaller housing," she wrote in her research note. She said that logic often leads to calls for tax reform including abolishing stamp duty to cheaper to move between housing, replacing it with a broad-based land tax (which raises costs the more land you own). "These options are both politically difficult as it would involve moving from a tax that applies to a small amount of voters each year who purchase property to one that will tax two thirds of voters (property owners)," she noted. Independent housing researcher Cameron Kusher, speaking to The Business in July, argued high transaction costs, namely stamp duty, discourage moving to a "better sized property" and can lead to people purchasing larger homes than they need to begin with. "People just feel like if I can get a better and bigger home sooner, that's a better outcome," he said. "If we look at what is being built, it's usually very large houses, four or five bedrooms, taking up most of the land on these new housing sites," Mr Kusher said. "A lot of it comes down to how much a piece of a property, [and] how much the land and the house, costs. "I think a lot of people are building bigger homes, thinking 'I'll spend a little bit more up-front and my family will grow into this home'. "It might just be a couple grandkids, or they're planning to have a couple of kids." He noted the effects of rapidly increasing property prices, which can leave people priced out of re-entering the market, and the fact that larger properties can be more likely to appreciate in value at a faster pace. Cotality's Ms Owen said other policy options to encourage people to move into appropriately sized homes could include reforming pension asset tests to include the value of the family home. "Strides are already being taken on the supply side to establish well-located apartments in our larger cities, that can accommodate smaller households. "But shifting demand through tax reform could help the take-up of these new homes." The government has accepted it is not on track to meet the target to build 1.2 million homes in five years, but Treasurer Jim Chalmers has stood by the ambition, despite Treasury advice it would not be met. In another recent note, Ms Owen questioned the focus of state and federal governments on speeding up building approvals to boost housing supply, warning that the construction industry simply cannot keep pace. "With completion times already above average and construction costs elevated, it seems an odd time to be incentivising more dwelling approvals and commencements," she said. Cameron Kusher argued past experience could be a guide on how to approach today's housing problems and ease the construction crunch. "Maybe we need to go back to how things were 30 or 40 years ago, where you have smaller homes and you make them easy to renovate," he told The Business. "Over time, people can actually add bedrooms, bathrooms, car parks, verandahs and all these sorts of things to add value to the home.
ABC News
5 hours ago
- ABC News
Productivity summit ends day two with progress on rules changes to boost housing supply
Rules holding back superannuation funds from investing potential billions of dollars into housing and renewables projects could face a shake up, after broad agreement at Canberra's productivity roundtable that there is a need for change. Super funds are required to meet a "performance benchmark", under laws designed to ensure funds are performing and maintaining the retirement savings of their members. But critics have said the rules around those benchmarks discourage investment in some assets, including a rule that requires stamp duty to be disclosed as a fee in a way that they say discourages housing investment. The government flagged it was seeking to rewrite the benchmark after a 2023 review similarly found it could unintentionally be discouraging investment in some assets. Rebecca Mikula-Wright, who heads the Investor Group on Climate Change, said there had been broad agreement at this week's summit that changing those rules could accelerate housing and renewables investment. "The Your Future Your Super performance benchmark was discussed a lot in the session I was in yesterday, and really around how that is constraining the ability of super funds to invest in higher risk projects they really want to invest into," Ms Mikula-Wright told the ABC. 'The treasurer did indicate he is likely to revisit those reforms." After a day of talks focused on finding agreement on one of the thorniest issues impacting housing and the environment — Australia's "broken" environmental approvals process — Treasurer Jim Chalmers expressed his pleasure at the "real prospect of a useful consensus" emerging on some of the country's key economic challenges. "Day two of the reform roundtable was really dominated by how we can boost housing supply, how we can responsibly reduce and improve regulation and speed up approvals," Mr Chalmers said. "I'm really encouraged by the consensus in the room for economic reform in these areas, and we're enthusiastic about some of the policies that participants put on the table." Ms Mikula-Wright said there had also been good support for a Productivity Commission recommendation to establish a "strike team" that could land faster approvals for key infrastructure projects, particularly around renewables. "We're competing with markets that are getting projects up faster and cheaper, so we have to do the same. Then we can attract more capital and get those projects rolling out," she said. After warnings from Housing Minister Clare O'Neil that red tape was dragging down housing approvals — and leaked Treasury documents indicating the government was considering a pause on the National Construction Code — attendees also agreed such a move should take place. The National Construction Code lays out minimum requirements for buildings on everything from fire exits and accessibility to insulation and capacity for electric vehicle chargers. But while changes to safety standards could continue, attendees discussed possible pauses on "non-essential" rules of the construction code, such as new requirements to lift energy efficiency standards. New South Wales Treasurer Daniel Mookhey said a pause on the code was needed, though the finer details were being worked through. "The pause is something that is where the conversation was concentrated on. In terms of how long it needs to be paused, who would do the review, what's the terms of reference, that work can be pursued," he said, "I think we will have a few more conversations at the roundtable and beyond to sort out those levels of detail." The ABC understands the government hopes to move fast on a pause, and not have discussions drag out for several months. After two successive terms of government failing to find a path through the thicket of reform on Australia's Environmental Protection and Biodiversity Conservation Act, attendees of today's roundtable were cautiously welcoming what appeared to be some progress. The complicated laws govern the environmental approval process for major projects, such as energy and mining projects, as well as housing and other developments where they potentially impact threatened species or significant cultural sites. But a major review of those decades-old laws published in 2020 concluded that they were no longer working for business or the environment — a view that today's roundtable attendees were agreed on. However, attempts under former environment minister Tanya Plibersek to update the laws were abandoned before the federal election — with a key sticking point being a plan to introduce a federal watchdog that could independently monitor EPBC approvals. Mining and other business groups did not support that proposed Environmental Protection Agency. But after extended talks today, they left saying they would be prepared to support an EPA, with a caveat that the final say would rest with the environment minister. There are still devils in the detail, including a desire from environment groups to see the EPA also given final approval powers on projects. But it marks the first significant advancement in EPBC discussions since they stalled last term. Australian Conservation Foundation chief executive, Kelly O'Shanassy, said there was agreement in the room that an EPA was needed but there remained different views on how it should operate. "There is a lot of support for efficient decision making, transparent decision making, accountability — that is not the current process," Ms O'Shanassy said. "You need to have an independent regulator that is held to account for the speed of its decisions and the quality of its decisions." Business Council of Australia chief executive, Bran Black, said a federal EPA should effectively be set-up in the same way as existing state-based authorities. "We take the view that it's really important to have a separation between the entity that is ultimately responsible for compliance and the entity that's ultimately responsible for approvals," Mr Black said. "In an ideal world, we wouldn't need to go down the path of creating multiple bodies at all [but] the government has committed to a new EPA. It's made it very clear, that's a point that it's taken to two elections now." "The question then is: what does this EPA do?" Environment Minister Murray Watt said, however, there was strong support around the table for "stronger" environmental protections and "faster and simpler" project approvals, through a more transparent process for businesses. "These are objectives our government supports, but we will ultimately need support across the parliament for reform. It was therefore very useful for the shadow treasurer, as a roundtable participant, to hear the depth of support for change," Senator Watt said. Opposition Leader Sussan Ley said the Coalition was willing to work constructively with the government to see reforms to the environment laws passed.
The Advertiser
6 hours ago
- The Advertiser
Red tape on chopping block in bid to build homes faster
The need to simplify the regulation of housing and environmental approvals has received widespread support at a major economic reform summit. But the devil, as always, is in the detail and divisions remain over the specifics. Treasurer Jim Chalmers promised "win-wins" on Wednesday morning at day two of his economic reform roundtable and unions and business found one in a plan to simplify the National Construction Code. Housing Minister Clare O'Neil garnered broad support over the need for a pause to the National Construction Code for the life of the housing accord, which runs until mid-2029 and sets a target for 1.2 million new homes. Changes to the code that deal with safety issues such as fireproofing would be exempt from a pause. But a broader rewrite was also possible. Master Builders Australia has been pushing for a review into "non-essential" changes, including EV charging requirements, which they argue increase the cost and complexity of building new homes. Australian Council of Trade Unions president Michele O'Neil said it was important to keep improving energy efficiency of new homes but acknowledged the nearly-3000 page document was "clunky", and called for more support for modular housing. Not all were on board with the pause. Australian Council of Social Service chief executive Cassandra Goldie was concerned about it leading to poorer housing quality, while outspoken Labor backbencher Ed Husic told the ABC it would mean "repeating the bad mistakes of the coalition". The opposition took a 10-year pause of the code to the last election, a policy which was not supported by Labor at the time, but Treasury advised pausing changes to the code in a document leaked ahead of the roundtable. The ACTU's Ms O'Neil agreed with business groups and the superannuation industry that there was need to reform the super performance test, which disincentivised long-term investments in housing and clean energy. There was also support for reforming the Howard-era Environment Protection and Biodiversity Conservation rules. Unions, employer groups and environmentalists all agreed the act was no longer fit for purpose. They want a new act that provides faster decisions for projects from mining to housing. Shadow treasurer Ted O'Brien said he would be as constructive as he could but would hold fire on supporting either of the proposals until he saw more details from Labor. Australian Conservation Foundation chief executive Kelly O'Shanassy said there was consensus for the creation of a national environment protection agency, but the "devil is in the detail". While business groups want the EPA to only deal with compliance and not project approvals, Ms O'Shanassy said you needed an independent regulator that is held to account for the speed and quality of its decisions. "So I would put to the folks who don't like the idea of a national EPA making decisions: what's your plan to get better, faster, more predictable decisions for your company and better outcomes for nature?" she said. NSW Treasurer Daniel Mookhey, who is representing all the states and territories at the roundtable, said he wanted the federal government's $900 million productivity fund increased, calling it an "excellent start". Increasing the fund could help other states and territories follow NSW's lead in adopting artificial intelligence to speed up planning approvals, he said. Regulation of AI has been a major dividing line between employers and unions heading into the roundtable, with the ACTU calling for the government to force employers to consult with staff before introducing AI tools to the workplace. But Australian Industry Group chief executive Innes Willox said there was little conflict with the peak union body in discussions about AI on Wednesday afternoon. The need to simplify the regulation of housing and environmental approvals has received widespread support at a major economic reform summit. But the devil, as always, is in the detail and divisions remain over the specifics. Treasurer Jim Chalmers promised "win-wins" on Wednesday morning at day two of his economic reform roundtable and unions and business found one in a plan to simplify the National Construction Code. Housing Minister Clare O'Neil garnered broad support over the need for a pause to the National Construction Code for the life of the housing accord, which runs until mid-2029 and sets a target for 1.2 million new homes. Changes to the code that deal with safety issues such as fireproofing would be exempt from a pause. But a broader rewrite was also possible. Master Builders Australia has been pushing for a review into "non-essential" changes, including EV charging requirements, which they argue increase the cost and complexity of building new homes. Australian Council of Trade Unions president Michele O'Neil said it was important to keep improving energy efficiency of new homes but acknowledged the nearly-3000 page document was "clunky", and called for more support for modular housing. Not all were on board with the pause. Australian Council of Social Service chief executive Cassandra Goldie was concerned about it leading to poorer housing quality, while outspoken Labor backbencher Ed Husic told the ABC it would mean "repeating the bad mistakes of the coalition". The opposition took a 10-year pause of the code to the last election, a policy which was not supported by Labor at the time, but Treasury advised pausing changes to the code in a document leaked ahead of the roundtable. The ACTU's Ms O'Neil agreed with business groups and the superannuation industry that there was need to reform the super performance test, which disincentivised long-term investments in housing and clean energy. There was also support for reforming the Howard-era Environment Protection and Biodiversity Conservation rules. Unions, employer groups and environmentalists all agreed the act was no longer fit for purpose. They want a new act that provides faster decisions for projects from mining to housing. Shadow treasurer Ted O'Brien said he would be as constructive as he could but would hold fire on supporting either of the proposals until he saw more details from Labor. Australian Conservation Foundation chief executive Kelly O'Shanassy said there was consensus for the creation of a national environment protection agency, but the "devil is in the detail". While business groups want the EPA to only deal with compliance and not project approvals, Ms O'Shanassy said you needed an independent regulator that is held to account for the speed and quality of its decisions. "So I would put to the folks who don't like the idea of a national EPA making decisions: what's your plan to get better, faster, more predictable decisions for your company and better outcomes for nature?" she said. NSW Treasurer Daniel Mookhey, who is representing all the states and territories at the roundtable, said he wanted the federal government's $900 million productivity fund increased, calling it an "excellent start". Increasing the fund could help other states and territories follow NSW's lead in adopting artificial intelligence to speed up planning approvals, he said. Regulation of AI has been a major dividing line between employers and unions heading into the roundtable, with the ACTU calling for the government to force employers to consult with staff before introducing AI tools to the workplace. But Australian Industry Group chief executive Innes Willox said there was little conflict with the peak union body in discussions about AI on Wednesday afternoon. The need to simplify the regulation of housing and environmental approvals has received widespread support at a major economic reform summit. But the devil, as always, is in the detail and divisions remain over the specifics. Treasurer Jim Chalmers promised "win-wins" on Wednesday morning at day two of his economic reform roundtable and unions and business found one in a plan to simplify the National Construction Code. Housing Minister Clare O'Neil garnered broad support over the need for a pause to the National Construction Code for the life of the housing accord, which runs until mid-2029 and sets a target for 1.2 million new homes. Changes to the code that deal with safety issues such as fireproofing would be exempt from a pause. But a broader rewrite was also possible. Master Builders Australia has been pushing for a review into "non-essential" changes, including EV charging requirements, which they argue increase the cost and complexity of building new homes. Australian Council of Trade Unions president Michele O'Neil said it was important to keep improving energy efficiency of new homes but acknowledged the nearly-3000 page document was "clunky", and called for more support for modular housing. Not all were on board with the pause. Australian Council of Social Service chief executive Cassandra Goldie was concerned about it leading to poorer housing quality, while outspoken Labor backbencher Ed Husic told the ABC it would mean "repeating the bad mistakes of the coalition". The opposition took a 10-year pause of the code to the last election, a policy which was not supported by Labor at the time, but Treasury advised pausing changes to the code in a document leaked ahead of the roundtable. The ACTU's Ms O'Neil agreed with business groups and the superannuation industry that there was need to reform the super performance test, which disincentivised long-term investments in housing and clean energy. There was also support for reforming the Howard-era Environment Protection and Biodiversity Conservation rules. Unions, employer groups and environmentalists all agreed the act was no longer fit for purpose. They want a new act that provides faster decisions for projects from mining to housing. Shadow treasurer Ted O'Brien said he would be as constructive as he could but would hold fire on supporting either of the proposals until he saw more details from Labor. Australian Conservation Foundation chief executive Kelly O'Shanassy said there was consensus for the creation of a national environment protection agency, but the "devil is in the detail". While business groups want the EPA to only deal with compliance and not project approvals, Ms O'Shanassy said you needed an independent regulator that is held to account for the speed and quality of its decisions. "So I would put to the folks who don't like the idea of a national EPA making decisions: what's your plan to get better, faster, more predictable decisions for your company and better outcomes for nature?" she said. NSW Treasurer Daniel Mookhey, who is representing all the states and territories at the roundtable, said he wanted the federal government's $900 million productivity fund increased, calling it an "excellent start". Increasing the fund could help other states and territories follow NSW's lead in adopting artificial intelligence to speed up planning approvals, he said. Regulation of AI has been a major dividing line between employers and unions heading into the roundtable, with the ACTU calling for the government to force employers to consult with staff before introducing AI tools to the workplace. But Australian Industry Group chief executive Innes Willox said there was little conflict with the peak union body in discussions about AI on Wednesday afternoon. The need to simplify the regulation of housing and environmental approvals has received widespread support at a major economic reform summit. But the devil, as always, is in the detail and divisions remain over the specifics. Treasurer Jim Chalmers promised "win-wins" on Wednesday morning at day two of his economic reform roundtable and unions and business found one in a plan to simplify the National Construction Code. Housing Minister Clare O'Neil garnered broad support over the need for a pause to the National Construction Code for the life of the housing accord, which runs until mid-2029 and sets a target for 1.2 million new homes. Changes to the code that deal with safety issues such as fireproofing would be exempt from a pause. But a broader rewrite was also possible. Master Builders Australia has been pushing for a review into "non-essential" changes, including EV charging requirements, which they argue increase the cost and complexity of building new homes. Australian Council of Trade Unions president Michele O'Neil said it was important to keep improving energy efficiency of new homes but acknowledged the nearly-3000 page document was "clunky", and called for more support for modular housing. Not all were on board with the pause. Australian Council of Social Service chief executive Cassandra Goldie was concerned about it leading to poorer housing quality, while outspoken Labor backbencher Ed Husic told the ABC it would mean "repeating the bad mistakes of the coalition". The opposition took a 10-year pause of the code to the last election, a policy which was not supported by Labor at the time, but Treasury advised pausing changes to the code in a document leaked ahead of the roundtable. The ACTU's Ms O'Neil agreed with business groups and the superannuation industry that there was need to reform the super performance test, which disincentivised long-term investments in housing and clean energy. There was also support for reforming the Howard-era Environment Protection and Biodiversity Conservation rules. Unions, employer groups and environmentalists all agreed the act was no longer fit for purpose. They want a new act that provides faster decisions for projects from mining to housing. Shadow treasurer Ted O'Brien said he would be as constructive as he could but would hold fire on supporting either of the proposals until he saw more details from Labor. Australian Conservation Foundation chief executive Kelly O'Shanassy said there was consensus for the creation of a national environment protection agency, but the "devil is in the detail". While business groups want the EPA to only deal with compliance and not project approvals, Ms O'Shanassy said you needed an independent regulator that is held to account for the speed and quality of its decisions. "So I would put to the folks who don't like the idea of a national EPA making decisions: what's your plan to get better, faster, more predictable decisions for your company and better outcomes for nature?" she said. NSW Treasurer Daniel Mookhey, who is representing all the states and territories at the roundtable, said he wanted the federal government's $900 million productivity fund increased, calling it an "excellent start". Increasing the fund could help other states and territories follow NSW's lead in adopting artificial intelligence to speed up planning approvals, he said. Regulation of AI has been a major dividing line between employers and unions heading into the roundtable, with the ACTU calling for the government to force employers to consult with staff before introducing AI tools to the workplace. But Australian Industry Group chief executive Innes Willox said there was little conflict with the peak union body in discussions about AI on Wednesday afternoon.
