Senate Economics Legislation Committee

Senate Estimates hearing, 28 Oct 2026

Searchable transcript of the Senate Economics Legislation Committee, 28 Oct 2026 Senate Estimates hearing, with chapters: Opening Remarks and Condolences for Dr. Helen Haines, Treasury Secretary's Opening Statement on Economic Outlook, Impact of AI Investment on Global Markets, Housing Market…

Chapters

Opening Remarks and Condolences for Dr. Helen Haines (16:03)
The Chair opens the hearing by expressing sympathies for Dr. Helen Haines following a recent attack and sets the tone for the proceedings.
Treasury Secretary's Opening Statement on Economic Outlook (20:00)
Secretary Jenny Wilkinson provides an overview of the global and domestic economic environment, highlighting inflation, interest rates, and geopolitical disruptions.
Impact of AI Investment on Global Markets (22:45)
Discussion on the rapid expansion of AI investment, its contribution to global growth, and the resulting pressure on resources and capital.
Housing Market Trends and Structural Drivers (25:31)
Analysis of the decline in established house prices, the impact of interest rates, and the structural effects of budget tax reforms on ownership.
Productivity Challenges and Fiscal Policy Updates (26:50)
Secretary Wilkinson discusses long-term productivity challenges, the role of AI, and government efforts to restrain spending through NDIS and aged care reforms.
Intergenerational Report and Organizational Changes (29:22)
Overview of the 2026 Intergenerational Report focusing on demographic change, AI, and energy transition, followed by Treasury leadership updates.
Discussion on Business Investment and Energy Transition (30:48)
The committee questions Treasury officials on the drivers of business investment, specifically the roles of AI data centres and the renewable energy transition.
Government Spending and Inflationary Pressures (36:30)
Senator Hume questions the Secretary on the relationship between government spending, aggregate demand, and inflation, referencing RBA modelling.
Deficit Projections and Private Sector Growth (45:48)
The committee examines the 2025-27 deficit projections and the unexpected strength of private sector demand compared to public sector contributions to economic growth.
External Shocks and Economic Forecasts (52:27)
The Treasury Secretary addresses the impact of Middle East supply chain disruptions and fuel costs on global inflation, alongside domestic fiscal assessments from various economists.
Foreign Investment Ban on Established Dwellings (59:02)
Treasury officials are questioned regarding the ban on foreign purchases of established homes and its potential impact on investor confidence in build-to-rent developments.
Compliance and ATO Housing Audits (1:03:31)
The ATO provides data on infringement notices and compliance audits for foreign investment in residential real estate, noting a significant decrease in applications following fee increases.
Housing Supply and SMSF Borrowing Restrictions (1:10:26)
The committee debates the impact of restricting Self-Managed Super Fund borrowing on housing supply and the role of the Local Infrastructure Fund in supporting new builds.
Interest Rates and Housing Market Lending (1:17:27)
Analysis of how interest rate hikes and tax reforms are shifting lending patterns, with a focus on the difference between existing dwelling purchases and new construction.
Transitioning from Fossil Fuels to Green Exports (1:23:29)
Treasury discusses modeling for Australia's net zero transformation, projecting that green exports will overtake fossil fuel exports by approximately 2032.
Modelling the Transition to Green Exports (1:23:29)
Examination of Treasury modelling regarding the projected crossover where green exports are expected to exceed fossil fuel exports by 2032.
Revenue Risks from Declining Fossil Fuels (1:28:29)
Analysis of the potential revenue loss from declining fossil fuel exports and the data underpinning Treasury's net zero economic transition forecasts.
Global Energy Demand and Modelling Assumptions (1:33:28)
Comparison of Treasury's long-term projections with ASEAN energy outlooks that suggest continued high demand for coal in the region.
Taxation of US Tech Company Royalties (1:39:21)
Inquiry into the ATO's taxation of service fees as royalties for US tech companies and potential diplomatic or trade repercussions.
Data Centre Investment and Economic Capacity (1:43:30)
Discussion on the massive pipeline of data centre construction and its potential impact on inflation, labour resources, and housing supply.
Economic Costs of Climate Change Risks (1:50:52)
Questioning regarding the economic modelling of physical climate risks, including the impact of extreme weather events like El Nino on the farm sector.
Fiscal Policy and Inflationary Spending Decisions (1:55:07)
Debate over the net impact of government spending decisions on inflation and the distinction between policy choices and estimates variations.
Regulatory Compliance Costs and Red Tape (2:09:15)
Senator Roberts discusses the burden of red tape, green tape, and compliance costs on private enterprise, questioning the Treasury's role in monitoring these impacts.
RBA Statement on Inflation and Monetary Policy (2:31:21)
RBA Governor Michelle Bullock delivers an opening statement addressing the cash rate increases, inflation targets, and the impact of global conflicts on energy prices.
Domestic Capacity Pressures and Productivity Challenges (2:34:29)
The Governor discusses domestic demand, labor market tightness, and the challenge of weak productivity growth in bringing inflation down sustainably.
Business Investment and Housing Market Trends (2:36:49)
An overview of business investment in data centres and renewable energy, alongside trends in the housing market, interest rate impacts, and financial stability.
Payment System Reforms and Card Surcharging (2:39:34)
The RBA outlines reforms to remove card surcharging and reduce merchant payment costs to improve competition and transparency in the payments industry.
Consultation on Merchant Fees and Surcharging (2:44:22)
Discussion on the extensive consultation process involving small and large businesses regarding the removal of card surcharging and reduction of merchant costs.
Economic Benefits of Lower Payment Costs (2:49:25)
The Governor explains how capping interchange fees and removing surcharges will lower costs for small merchants and increase competition in the payment sector.
Inflation Data and the Central Bank's Outlook (2:52:54)
Analysis of recent CPI data showing headline inflation at 4.3%, and a discussion on the risks of unanchored long-term inflation expectations.
Impact of Government Spending on Demand (2:55:10)
Examination of how federal and state government spending contributes to aggregate demand and its subsequent role in driving domestic inflationary pressures.
Domestic vs International Inflationary Pressures (3:00:14)
A comparison of Australia's inflation target and current rate against international peers, focusing on the role of domestic excess demand and productivity.
Supply Shocks and Long-Term Inflation Risks (3:08:26)
Discussion on how compounding supply shocks from climate change and global conflict impact inflation expectations and the effectiveness of monetary policy.
Data Centres, AI, and Financial Stability (3:17:15)
Assessment of the inflationary impact of massive data centre investments and the potential financial stability risks associated with AI-driven market exuberance.
Negative Equity and Housing Deposit Schemes (3:23:39)
Discussion on the prevalence of negative equity among borrowers, specifically those in government housing deposit schemes.
Construction Profitability and Housing Supply Constraints (3:28:26)
Analysis of falling dwelling investment forecasts, construction sector profitability, and regulatory constraints on housing supply.
Monetary Policy Impact on Household Spending (3:34:54)
Examination of how interest rate increases affect household discretionary spending and cash flow constraints.
RBA Remit and Supply-Side Inflation Challenges (3:41:34)
The RBA Governor explains the limits of monetary policy in addressing supply-side inflation shocks and the bank's remit.
Productivity Stagnation and Neutral Interest Rates (3:45:30)
Governor Bullock discusses the impact of stagnant productivity on economic growth and the neutral cash rate.
Productivity Growth Forecasts and Treasury Assumptions (3:53:46)
RBA officials explain the downgrade of productivity growth assumptions and compare them with Treasury's long-term forecasts.
Trimmed Mean Inflation and Global Comparisons (3:58:15)
Discussion on the RBA's focus on trimmed mean inflation and how Australia's economic position compares globally.
Comparison with International Central Bank Policies (3:59:58)
The Governor compares Australia's economic position and policy rates against other advanced economies experiencing different demand-supply dynamics.
Advertising Costs for Housing Deposit Schemes (5:05:56)
Treasury officials discuss the $8.7 million advertising campaign for the 5% deposit housing scheme and its reach across different languages.
Appointment Processes and Conflict Management (5:08:38)
Discussion on the department's processes for managing private interest declarations and conflicts during the appointment of board members.
Housing Australia Board Conflict Assessments (5:10:46)
Specific inquiry into conflict management for the Housing Australia board and the assessment of potential conflicts for specific appointees.
FOI Requests on Budget Modeling (5:12:00)
Senator Bragg questions the heavy redaction of budget modeling and tax change data in FOI request 434.
Legal Basis for FOI Redactions (5:14:31)
Treasury legal counsel explains the application of Section 47E exemptions regarding adverse effects on agency operations.
Government Transparency and FOI Policy (5:16:33)
A debate on government secrecy, the proper application of exemptions, and the effectiveness of the Freedom of Information Act.
Implementation of Financial Services Red Tape Cuts (5:19:45)
Markets Group officials provide updates on the legislative progress and implementation status of 14 red tape reduction measures.
Climate Disclosures and Sustainability Reporting Burdens (5:26:06)
Examination of climate-related financial disclosures and sustainability reporting as part of the government's regulatory reform package.
Timeline for Implementing Regulatory Reform Packages (5:30:15)
Analysis of the schedule and prioritization for broader government regulatory reform packages totaling over ten billion dollars.
Consulting and Audit Sector Reform Consultation (5:36:18)
Review of the options paper and public submissions regarding reforms to the accounting, audit, and consulting sectors.
Managing Conflicts in Large Consulting Partnerships (5:41:00)
Debate on partnership caps and managing structural conflicts of interest within major consulting firms and their lobbying activities.
Review of Corporate and Tax Whistleblower Laws (5:44:22)
Update on the statutory review of tax and corporate whistleblower protection frameworks and the government's response to urgent reform calls.
Calculating Net Savings from Regulatory Reforms (5:47:56)
Technical discussion on accounting for gross versus net reductions in regulatory compliance costs when new regulations are introduced.
Commonwealth Impact of Card Surcharge Ban (5:55:00)
Investigation into the financial implications for government agencies and small businesses following the RBA decision on card surcharges.
Small Business and Surcharge Ban Implementation (6:04:01)
Examination of the impact of the surcharge ban on small businesses, the government's decision to extend the implementation timeframe, and the role of the Reserve Bank in the process.
ASIC and the Defective Administration Scheme (6:14:52)
Analysis of the Scheme for Compensation for Detriment caused by Defective Administration (CDDA) as it applies to ASIC following a Federal Court ruling regarding the agency's independence.
E-Conveyancing and Price Parity Clause Reform (6:17:38)
Updates on the national interoperability reform for e-conveyancing and efforts to abolish price parity clauses for online booking platforms through new ACCC regulations.
Crowdfunding Platforms and Procedural Fairness (6:24:07)
Inquiry into whether crowdfunding platforms provide sufficient procedural fairness when removing or restricting fundraising campaigns and the laws governing these actions.
Mandatory Climate Financial Disclosure Regime (6:28:00)
Review of the mandatory climate financial disclosure regime starting in 2025 and proposed measures to reduce the compliance burden for different sizes of business entities.
Regulatory Reform and Red Tape Reduction (6:35:28)
Debate over the government's claimed $780 million in red tape savings, the methodology for banking future savings, and the impact of EPBC Act reforms on compliance costs.
Government Spending and Fiscal Pressures (6:40:44)
Discussion on government spending as a share of the economy, real spending growth, and structural pressures from the NDIS, health, aged care, and defense interest costs.
Housing Australia Future Fund Performance (6:45:37)
Scrutiny of the Housing Australia Future Fund (HAFF) regarding its spending efficiency and the number of houses constructed to date.
Tax-to-GDP Ratio and Deficit Debate (6:49:20)
Analysis of the tax-to-GDP ratio reaching 24.1% and a discussion on running deficits during periods of full employment and high commodity prices.
Real Growth in Government Payments (6:52:24)
Scrutiny of the government's claim of 2% average real growth in payments versus specific annual spikes of 5.5% and 4.3%.
Cumulative Impact of Budget Decisions (6:54:53)
Review of the $103 billion in net government decisions since the election, focusing on investments in Medicare, hospitals, and the PBS.
Capital Gains and Trust Tax Reform (7:16:52)
Discussion on Capital Gains Tax changes affecting junior mineral explorers and the impact of trust reforms on small business income splitting.
Discretionary Trust Reforms and Restructuring Costs (7:23:54)
The committee discusses the impact of discretionary trust changes on small businesses, including the estimated 350,000 entities affected and the associated transitional restructuring costs.
Small Business Income Splitting and Family Impacts (7:28:09)
A debate occurs regarding the role of stay-at-home parents in small businesses and how the new trust rules might effectively end income splitting benefits for family-run enterprises.
High Court Bendel Decision and Division 7A (7:31:42)
Treasury addresses the significance of the High Court's Bendel decision regarding bucket companies and unpaid present entitlements, clarifying its relationship to the structural budget reforms.
Consultation Process for Complex Trust Legislation (7:34:41)
Officials are questioned on the 12-day consultation window for the exposure draft of the trust legislation and the volume of confidential versus non-confidential submissions received.
Modelling Effective Tax Rates for Small Businesses (7:40:45)
Treasury defends its modelling of the trust regime, addressing concerns about effective tax rates potentially exceeding 60% and the distributional analysis of private trust holdings.
Building Sector Compliance Costs and Policy Timeline (7:47:47)
The hearing concludes with a focus on the building and construction sector's compliance costs and a heated exchange regarding the timeline of the government's pivot on trust tax policy.
Government Shift on 2019 Tax Policies (8:05:06)
The Minister acknowledges a change in the government's position regarding negative gearing and other tax reforms previously excluded from consideration.
Treasury Stakeholder Engagement on Tax Reform (8:09:25)
Officials explain that tax reform is a non-linear process involving constant monitoring of the system and engagement with industry stakeholders.
Impact of Trust Tax on Olympics (8:13:24)
Senator McKenzie raises concerns about the 30% minimum tax on discretionary trusts affecting the Australian Olympic Foundation's ability to fund athletes.
Delays in Film Production Tax Offset (8:24:00)
Senator Smith queries why the production tax offset for the film industry, a 2024 budget measure, has not yet been legislated.
Legislative Priorities and Senate Productivity (8:29:49)
Discussion on the prioritization of Treasury bills and the impact of Senate processes on the delivery of government tax measures.
Net Zero and Intergenerational Modelling (8:34:12)
Senator McDonald questions Treasury on how net zero transformation and fossil fuel export declines are factored into long-term revenue projections.
Small Business Impact of Trust Tax (8:45:14)
Examination of the higher tax burden and advice costs for small businesses under proposed trust tax changes.
Industry Breakdowns for Trust Tax Revenue (8:51:47)
Officials explain the lack of industry-specific breakdowns for revenue raised from trust tax changes.
Modeling Green Exports and Commodity Demand (8:55:51)
Questioning the assumptions behind green commodity export projections versus established coal and gas industries.
Fuel Tax Credits and Carbon Pricing (9:00:43)
Discussion on the fuel tax credit scheme and whether its removal would function as a carbon tax.
UN Convention on International Tax Cooperation (9:05:54)
Australia's participation in UN negotiations for a framework convention on international tax and global minimum tax rules.
Revenue Estimates for Government Tax Reforms (9:15:29)
Review of revenue projections for various tax reform measures including CGT and trust changes over the medium term.
Trust Tax Exemptions for Primary Production (9:23:04)
Clarification on how primary production income is treated under trust tax changes and the availability of rollover relief.
Restructuring Costs and Revenue Estimates for Agricultural Sector (9:26:12)
Discussion concludes on the estimated revenue from the agricultural sector and the costs for businesses to restructure, followed by the adjournment of the Revenue Group session.