Senate Economics Legislation Committee, , 1:08:43 to 1:22:32
Discussion focuses on housing supply targets, dwelling investment forecasts, and the National Construction Code.
Topics: Infrastructure, EPBC Act, Government spending
Speakers: Jenny Wilkinson PSM, Andrew Bragg, Dr Angelia Grant, Unknown Speaker, Hon Katy Gallagher, Lisa Darmanin
>> Thanks, Chair. I just want to ask you some questions about housing. So, uh, is housing a top priority for the
>> Is that a trick question, Senator Bragg? Because I feel like I've answered that a number of times already, and if you're looking for a different answer, you're not going to get one.
>> Is it is it a top priority for the >> Okay. I mean, it wasn't in the secretary's speech today, so I was a bit surprised that it was.
>> Well, the secretary's address is the secretary's um remarks to committee. You asked about a government priority. I'm answering that.
>> Yeah. Will they work for you? So, basically, the the government is spending I mean, the housing minister brags about spending $43 billion on housing.
>> Sorry, Senator. I think I did talk about dwelling investment. Um, in my opening statement, I talked about the fact that it has been gaining momentum. I talked about the fact that while approvals have been volatile, housing supply has picked up. So, Senator, I I did actually talk about housing investment
>> dwelling/ the problem is it's going in the wrong direction, isn't it? The dwelling investment because the RBA data shows that in June 26 it'll be 3.7%, June 27 it goes down to 1.1 and by June 28 it's negative 0.4. Sorry, Senator,
what I'm not sure quite what you're talking about.
>> Uh, dwelling investment
>> growth in dwelling investment.
>> Yes. Is is trending negative over the next few years, isn't it?
>> Well, doc Dr. Grant to answer that question.
>> According to the RBA,
>> good morning, Senator. Dr. Angela Grant, Deputy Secretary Macroeconomic Group. Uh, I think you are referring to RBA figures.
>> That's right.
>> Uh, I can refer to our figures in the
2025. your figures, but why do you think the RBA is forecasting a drop in dwelling investment over the next few
>> Uh, it's difficult for me to speculate on the RBA forecast, but the one thing that they have been clear about is they make a technical assumption in their forecasts about the future path of interest rates. As you would know, Senator, uh, interest rates are an important driver of dwelling investment that that may be affecting their
housing minister brags about splurging $43 billion on housing. Is that the figure that you use internally? Treasury
so I I am so I'm aware of the composition of that um that um that spend across different measures. I mean again sen so I'm happy to answer to the extent that I can but c certainly I understand how um this the the uh calculation of $45 billion is spread across a range of different programs and it's and it's a and it's a completely reasonable um uh summation across the different government programs.
>> Okay. Because the housing minister is a treasury minister right?
Uh she is a minister in the treasury portfolio. Yes.
>> Yeah. Okay. So
>> and I have a group that is focused on housing policy
>> but the treasury have given her that figure of I think you said 45 billion did you?
>> Uh so my understanding is is it is over $45 billion. Um
>> okay. So 45 billion bucks. I guess the question is well what are we getting for that? Because overall we're not getting the same number of houses that we were getting in the past, are we? I mean, we're we're trending at 170,000 houses a year over the course of this government. Be lucky to get 180,000 houses this year. So with all this money, why aren't we getting more houses?
So, I think it'd be most appropriate if housing group took you through um the details, all of the different components of the housing of of the uh housing programs. Um they are of course focused on a range of different things including providing infrastructure to support um uh the states uh to um to build more housing. It includes uh the investments that the government's making in social and affordable housing. um uh and but the government has has also been uh clear that uh in an overall sense there are other settings uh that are important for >> um supporting ongoing housing investment. So
>> I understand that but I guess I'm trying to work out why the numbers aren't going up that they're not getting back above 200,000 where they were last decade in the main um given this huge investment. I mean we hear all this rhetoric. I mean, and this is one of the reasons why I think people frankly, you know, lose confidence in these institutions because there's all this bragging about how much money is going out the door, but the the results are terrible. I mean, we get we objectively getting fewer houses and the RBA is predicting that we're going to be >> negative on dwelling investment in the next two years, which is right in the middle of the housing accord.
forecasts that dwelling investment will grow by 5 a.5% in 256 and by 6% in 267. That's a reasonably strong uh rate of growth >> um for dwelling investment. >> Um there has been an elevation in approvals. Um there's been an elevation in um the pipeline of dwellings that are under construction and all of those we expect to support
those words you use then are making my point for me. You're talking about approvals. You're talking about your projections, which sometimes are wrong. What I'm wanting to know about is completions.
>> We do our best to So, so, so that's right, Senator. And when you look at um the approvals data, as I said, I think in my opening statement, the approvals data are always are always um fairly volatile. um approvals are now at a level which as I understand it is above our um uh our assessment of what the growth in underlying supply needs to be. I think that's the first time that they've been above that level. >> Uh I don't have that uh in front of me, but I I'm sure I've been briefed along that way. Okay. Oh, hang on a minute. >> Um yes, so building approvals have risen to levels above what we estimate to be new housing demand.
>> But as you know, there's a big difference between approvals and completion. So
>> yeah, that's right. But it's important that you need to have approvals in order to get the investment and then to get the completions.
>> Okay. So obviously like I get that you don't want to cast dispersions on the reserve bank's data. I get that. Fair >> Um but um you know even your my EO has downgraded dwelling investment compared to the budget. So why is why is that happening? I mean we're spending the government spending $45 billion on housing and now dwelling investment's heading south. So what's the reason for the downgrade?
>> So Senator uh you are correct that in 2026 27 in the budget we forecast dwelling investment to grow by 7 and a half%. And in the mifo we forecast it to grow by 6%. >> Yeah. >> One of the main driving factors of that is we like the Reserve Bank take a technical assumption on interest rates across the forecast horizon. We had a slightly higher interest rate profile uh in these forecasts than we had in the budget forecasts that would affect the dwelling investment forecast in 2026 27.
>> So let let's go to one of the government's flagship kind of housing delivery agencies is housing Australia future fund. So secretary how's that going? How many houses is that built
So again, Senator, I think that these questions of detail are better put to
>> a detailed question.
>> So Senator, that I think they are most appropriately put when I have the when they're the the the house coming. >> They're coming tomorrow.
>> The department I think is it reasonable to assume you'd be briefed on how many houses the government agencies built?
this this session is a session about u macroeconomic and international and corporate matters. Um uh the um I can see what information that I can uh provide you with but these are matters of detail which which where I think it's most appropriate that I have the um relevant stuff.
>> Two minutes.
>> Well, let me ask you about the governance then because there's been a lot of debate about the cohesion problems at Housing Australia. Have you been briefed on this intersection report that was done into the governance of housing Australia which cost taxpayer $24,000?
>> So I am aware of that report and I understand that was a report which was conducted in uh it was either it was it was I think early 2024. So this is a these are issues which I think have been aired at estimates on a number of occasions. So um uh since that time there have been some significant changes in the leadership and the um governance at Housing Australia. Um and uh again you know the the relevant officials will be able to speak to you about the details of how that uh of those changes. >> Okay. So highop these matters have been
taken very seriously by Treasury and by the future of the governance of housing Australia there then.
>> So these all I'm saying is these were matters which were raised I think I think nearly two years ago. They've been very significant changes since then. These the these the issues that were raised were taken seriously.
>> Sure. I mean I just have one more question. I mean I don't know that they're old issues. I mean there's article in the financial review saying that the agencies only supplied a couple hundred houses with it 10 billion bucks. So I'm not sure that they're going away. Look, just finally because I can feel the chair wants to wind me up and I always like to be efficient um with taxpayer resources um is I I just I mean I think there's no doubt that the productivity challenge in housing is immense. I think that's been well flagged by you before and by the treasurer and indeed there was u a an economic summit or I think an economic reform summit it was called
>> the reform round table.
>> Yep. In the cabinet room. Yep. Very very democratic. Um and so in that outcome from that meeting, there was a promise to slash red tape in housing. >> Because it was recognized that was an urgent priority. So how much red tape has been cut from the housing sector since that meeting?
So there were a couple of key commitments um in at the economic reform one of them was to pause changes in the national construction code um uh and to streamline the national construction code. That was undertaken um sorry the pause was undertaken immediately and we are currently consulting on streamlining and modernizing the code. I guess when
will that be finished?
>> Uh I think that well I understand that consultations will close on the 27th of Um and uh so it's under active consideration. Uh the other commitment was that was made was that they there should um that the assessment so we needed to fast track the assessments of homes that were currently sitting under the EPBC act. Um there were more than 26,000 homes at that point which understand were under EPBC act consideration and I a very substantial proportion of them I have the figure here because I remember reading it uh have been approved.
>> Okay. So
>> remember that >> so that was change to the EPBC that you didn't support. >> So we got we got it done anyway. So
that's so now
>> that's true. You come in here and winge about things you obstruct.
>> We took it to the election.
>> You obstruct in the Senate.
>> Took that idea to you come in here. It was good. >> I can't cop that from you. Sorry on that issue.
>> So So 17,000 of the 26,000 dwellings which were waiting for approval have now been approved.
>> What about NCC? When when will that be approved? >> Yeah, this is I just want to get clarification. When do you think the new NCC will come in?
So I so as I say the the the existing code has been so changes to the existing code have been paused >> um and uh I'm not in a position to advise on um what the timeline is around streamlining and modernizing the code but when housing officials come then I would I'll see how much they can help you. I mean with things like the national construction code um there is a very significant kind of change management process which is required because given how many different people engage with the code so
>> that's why the pause started immediately
>> hopefully this decade
um we have more than 40 minutes worth of people still wanting to ask questions so I'll just keep pe ask people to keep um efficient if you can so Sharma you're up