Stephen Cenatiempo:
Dr Andrew Leigh is the Member for Fenner, Assistant Minister for Productivity, Competition, Charities and Treasury. Andrew, good morning. I think from the government’s perspective, if you could get the Coalition to negotiate with you, and you and I have had discussions about these tax policies, I don’t want to go into the ins and outs of it, but you’re probably better off negotiating with the Opposition than the Greens on these anyway, aren’t you?
Andrew Leigh:
I think that would be a matter for Jim Chalmers and his team in the Senate. Our view is this is a good policy. We took it to the election. We’re keen to have it implemented as we took it to the election.
Cenatiempo:
Okay. All right. Well, yeah, we all know that parts of it are bad policy, but we’ll go on from that. Now, I want to talk about defence spending for a moment before I get to your speech that you’re going to deliver today. There seems to be mixed reports whether or not the US wants us to increase our defence spending by 3 to 3.5 per cent of GDP, or 5 per cent of GDP – whichever it is. We know that we’re not spending enough on defence but the argument, and this is the same argument coming from the government on the Opposition here, is we’re not going to be told what to do by the US despite the fact that they’re telling us to do the right thing. Well, you know, I mean, who cares who’s telling you if it’s the right thing to do?
Leigh:
We’re certainly increasing defence spending. As you know Stephen, we’ve got defence spending now at record levels. Biggest peacetime increase in defence spending in Australia’s history…
Cenatiempo:
But it doesn’t kick in for 10 years. And let’s be honest about it and say, you know that you’re talking about increasing the 2.4 per cent, but by the time that 2.4 per cent kicks in China will have taken over Australia?
Leigh:
Well, let’s just take the last financial year Stephen. Defence spent $16.6 billion on acquisition. That’s the highest on record by over $2 billion. This financial year, defence is on track to spend more than $17 billion in acquisition.
Stephen Cenatiempo:
But we’re still only spending 2 per cent of GDP, which as a proportion is lower than it’s ever been?
Leigh:
I know that our defence spending is at record levels. We’re looking to double the size of the Australian Navy surface combatant’s fleet. As you know, acquiring nuclear power submarine capacity and acquiring long range strike capacity sooner, building long range strike missiles here in Australia. This is significant investment going right across the 3 forces. It recognises that the strategic situation has changed significantly and Australia needs to step up.
Cenatiempo:
Well, we certainly do, and I think the US is right here. But that’s the point I’m getting at is that, you know, if the US is telling us the right thing to do it’s not good enough for us to say, ‘you’re not the boss of me.’ If it’s the right thing to do, we just need to do it?
Leigh:
And we’re working very strongly with allies. You would have seen Richard Marles important speech at Shangri‑La Dialogue, the most important regional dialogue on national security issues and his constructive relationship with many of the leaders in the region. We do understand we need to work together on this and need multiple alliances and that’s been a big priority for Australia in the in the region.
Cenatiempo:
I want to talk about the speech you’re going to deliver today. You’ve sent us a copy of the speech you’re going to deliver in Melbourne; ‘The abundance agenda in Australia’. Talk to us about just the title there. What do you mean by that?
Leigh:
It sparks off a recent book by Ezra Klein and Derek Thompson in the US, which argues that it’s important to be building more stuff and that a series of well‑intentioned regulations have gummed up the works and made it harder to build housing or infrastructure or sometimes even clean energy projects. These regulations aren’t problematic in themselves, but when you put them all together, they made it a lot harder to build. As I talk in the speech about the way in which my suburb of Hackett was rolled out in the 1960s with contracts for around 9 months of producing homes. Now, in some parts of Canberra it takes 9 months to get through the initial stage of building approvals. And so that slows down our ability to produce affordable housing for middle class Australians.
Cenatiempo:
You’re right, because I was speaking to some builders on the weekend who said that exact thing. Because I remember when I was working in real estate and the building game, and I’m talking, you know, 25–30 years ago now, you get a house built in 3 months. Now they’re saying, ‘well, you can’t get one approved in 12 months, let alone the building phase of it’. But there was something else I read between the lines in your speech is that you talk about the suburb of Hackett and the ex‑govie homes and those kind of things and I think that some of the suburbs that I grew up around in Sydney, are we expecting too much these days? They were very basic homes that served a purpose rather than served a lifestyle, if that makes sense?
Leigh:
Yeah, I mean it’s certainly basic homes, but we have seen this problem over the last generation Stephen, where construction sector productivity has fallen substantially – adjusting for quality, it’s down 12 per cent. You have the ACT Planning Minister Chris Steel saying that ‘townhouses, terraces, walk up apartments are effectively prohibited in most residential zones in Canberra’.
Cenatiempo:
He’s the Planning Minister though.
Leigh:
That’s right. They’ve drafted a Missing Middle Housing Design Guide which is trying to promote ‘gentle density’ options that align with existing neighbourhoods. So I don’t think the government is ignorant of these problems, indeed they’re working hard on them.
Cenatiempo:
There’s an interesting any point, though, I want to go back to the point you made it’s the suite of policies that actually contradict each other. And I’m not I’m trying not to put words in your mouth here, but if we look at this Missing Middle policy, most people agree that the crux of it is right. But unless you change the lease variation charge part of the legislation then nobody’s actually going to take up the option. So, is that what you’re talking about? Those conflicting bits of legislation?
Leigh:
Yeah. When I talk to builders, it’s less about the price and more about the timeline. So, you know, the second half of last year, we’ve only got 7 significant development applications processed in the ACT and the median wait time is more than 100 days. That’s an issue that I think the government recognises and certainly the federal government is keen to work with states and territories in order to get more homes built. We’ve got an ambitious housing target. We need to make sure that the regulations aren’t holding it up.
Cenatiempo:
But here’s the point, though, because federal governments nowadays don’t build homes. I mean, once upon a time there were federal roll‑outs and maybe we should look at that again. But it’s all well and good to say you’re going to work with state and territory governments and local governments. But unless you pull out the stick and make them get their act together all of it is talk?
Leigh:
Partly is also about setting targets. So, in New South Wales they’ve got real time reporting of approval times across councils, and I mention in the speech North Sydney Council, which has some of the slowest approval processes. They approved just 44 new dwellings between July of last year and February of this year. Whereas their pro‑rata target was 787 homes. So, councils being held to account by state governments I think is a useful process and having that conversation as to what’s holding up the building of houses.
Cenatiempo:
But what’s the incentive there? Because all you’re doing is, okay, it’s well and good to name and shame, but most local councils probably don’t care if they’re being named and shamed. How do you actually force them to do what they need to do?
Leigh:
Yeah, and the states are taking different approaches on this. Certainly, state housing ministers recognise the challenge they’ve got and they’re engaging with their local councils. It’s going to be horses for courses across the country. But what I’m trying to do is kick off the conversation about the role that regulation plays. As a progressive, I tend to be in favour of careful regulation to look after occupational health and safety, environmental concerns, disability access. We just need to make sure that those systems work together and so they’re not impeding the building in new homes.
Cenatiempo:
And I think you’ve hit the nail on the head that they are not working together at the moment Andrew. I look forward to the response to your speech when you deliver today. Thanks for your time this morning.
Leigh:
Thanks Stephen.
Cenatiempo:
Thank you Dr Andrew Leigh, the member for Fenner, Assistant Minister for Productivity, Competition, Charities and Treasury.