15 May 2024

National Press Club address, Q&A


Subjects: Federal Budget 2024–25, cost‑of‑living relief, responsible economic management, energy bill relief, inflation, Future Made in Australia, responsible economic management, building more homes.


Thanks, Treasurer. You’ve spent the last 24 hours trying to persuade everybody of the merits of the Budget, but I’d just like to do a slight bit of role play here and see if I could get you to tell us how you’re going to persuade Michelle Bullock about the merits of what you’ve done.

As you say, the energy rebate and other measures will buy mechanical reduction in the inflation rate. But can you just tell us what else in the Budget will help reduce inflationary pressures; for example, what’s your feeling about a halving of migration, does that actually add to inflation or take away from it, and are there other factors we should be considering, and that she should be considering?


Thanks, Laura. I’ll try and deal efficiently with what I think are probably 3 parts of that question.

First of all, in relation to the Reserve Bank, all of you working journalists in the room know that I don’t make predictions or pre‑empt decisions taken independently by the Reserve Bank, they will weigh up a whole range of factors and the Commonwealth Budget won’t be the only factor that they weigh up; they’ll weigh up global and domestic conditions and a whole bunch of other considerations as well.

I don’t tell Governor Bullock how to do her job, she doesn’t tell me how to do my job. We do compare notes, and we discuss the fiscal position, we discuss the government’s strategy. I’ve been able to brief her along with the Treasury Secretary on the Budget in advance of handing it down. That is, I think, the normal part of working closely together as we both, in our own domains, do what we can to put downward pressure on inflation.

Which brings me to the second part of your question. One of the reasons why inflation has moderated so substantially, not the only reason, but a key reason is because when we came to office and inflation had a 6 in front of it and now it’s got a 3 in front of it, we have gone out of our way to manage the Budget in the most responsible way that we can; getting the Budget in much better nick, making inflation our primary focus. And that applies to the design of our cost‑of‑living relief as well.

And there has been an effort, I think, to kind of recategorise and redefine and reclassify what inflation is in our economy. I think people understand in the communities of this country that if you get power bills down and you get rent a little bit down, that puts downward pressure on inflation and that’s what matters.

And the very firm advice from our departments was that the Budget, and particularly the cost‑of‑living package, will put downward pressure on inflation without adding to inflationary pressures elsewhere in the economy.

Third part of your question was about migration. And you’re right to remind our guests here that there is a fairly substantial moderation in migration built into the Budget. Net overseas migration next year will be half what it was last year. We had that spike in the post‑COVID period, which was primarily students and long‑term tourists, and that meant the numbers were a bit higher, and now they’re moderating to more normal levels.

I think most people would recognise that migration’s got an important role to play in our economy, but it needs to be well‑managed, and we need to make sure that we can manage the pressures. We’ve got a big housing package, a big infrastructure package, and also in migration more specifically, we’ve ended the COVID visa, colleagues are managing the student intake more appropriately, and all of that is helping as well.

We’re seeing a substantial moderation in inflation in the forecasts, and in the last couple of years as well. And that is largely because of how we’re managing the Budget, but it will also be increasingly about how we’re managing the population as well.


David Crowe has a question.


Thank you, Laura. Thanks, Treasurer, for your speech. David Crowe from The Sydney Morning Herald and The Age of Melbourne.

The question on the big picture with this Budget, which is at that federal payments are due to go up in the next years to 26.6 per cent of GDP, now according to the historical data in the Budget papers, that’s the highest level in 38 years outside the two years of the pandemic.

So my question is where is the emergency that justifies payments going to that level? Why is it not possible for you and your Cabinet colleagues to decide the spending priorities in a way that keep overall payments down back to more normal levels?


Thanks, David, for your important question. This is partly about unavoidable spending. There was a whole bunch of stuff in the Budget that Katy has spoken about on other occasions, and you’ve been there for that.

There have been a lot of terminating programs in the health system or things like myGov, which I think any reasonable person would assume is an ongoing program but was only funded temporarily by our predecessors. We’ve had to extend that. We’ve done our best to explain why that is necessary. That’s part of the story.

Payments have also gone up over the last couple of years because a lot of our social security system, for example, in good and appropriate ways is based on indexation. When we’ve had this higher inflation than usual, that’s part of the reason that drives our payments. That’s why it’s quite absurd, frankly, that Angus Taylor describes the indexation of the age pension, for example, in a category of things he describes as over‑spending. Indexation plays a role.

But what really matters here, I think, when it comes to getting the Budget into much better nick, in addition to the savings we’ve talked about, in addition to those two surpluses, is real spending growth. Because real spending growth takes into consideration indexation of payments and the like, and real spending growth is a fraction of what it was before; 1.4 per cent over the 6 years covered by our government and our 3 Budgets, 1.4 per cent. And that is dramatically lower than the 4.1 per cent we saw under our predecessors, and it’s around half of what we’re seeing in the 30‑year average.

So, I’d encourage you to check out what we’re doing with real spending growth restraint in combination with savings, banking upward revision in revenue, delivering those two surpluses, avoiding $80 billion in interest repayments on the debt.


Clare Armstrong.


Thanks for your speech today, Treasurer. Clare Armstrong from the Daily Telly, Courier Mail, Herald Sun and Adelaide Advertiser.

I remember last year – ahead of the last election, Labor promised its powering Australia plan would: cut power bills for families and businesses by $275 a year for homes by 2025 compared to today.

So based on the latest default market offers for the next year, even with a $300 rebate, the average typical household power bill will be between $275 and $727 higher than that target.

So is it time now to concede that that promise can’t be kept?


Well, I think part of the answer to your question, Clare, is in the question itself. You are referring to a 2025 outcome based on a 2021 forecast, and we’ve found a way to help people with their energy bills right now in 2024 when the pressure’s on.

We did it in the last Budget, we’ve done it in a more substantial way in this Budget, and it’s a really crucial part of our cost‑of‑living package.

If you look at the cost‑of‑living package presented last night, a tax cut for every taxpayer, energy bill relief for every household, assistance with rent and medicine costs, this is all about taking pressure off people, and the benefit for every household will be greater than the forecast that you have just described in your question.


Phil Coorey.


Thanks, Laura.

Hi Treasurer. Just back to Laura’s question. I’ll ask it a different way, if I could. If the CPI does fall back within the 2 to 3 per cent band, as the Budget now predicts, by Christmas or not much later, can you see any reason why the RBA shouldn’t cut rates?


Well, part of my answer is the same as what I’ve given to Laura today and you on other occasions, and probably 6 or 7 hundred times to your colleagues here in the course of the last two years.

There are good reasons why Treasurers don’t get involved in that kind of prediction or pre‑empting decisions taken independently.

I take responsibility for my part of this. And my part of this, working with Katy and our team and Anthony and others, is to make sure we’re doing what we can to manage the Budget responsibly and put downward pressure on inflation.

I’m confident that that’s what we’ve done in this Budget. Inflation has come off really substantially over the course of the last couple of years, but it’s not mission accomplished because people are still hurting. And so that’s why the Budget’s got a big focus on the cost of living and fighting inflation. We will do our bit and the Reserve Bank will take its decisions independently, and that’s appropriate.


Michelle Grattan.


Michelle Grattan from The Conversation.

Treasurer, can I take you to the Future Made in Australia policy. Critics have said that that policy needs exit ramps for when investments turn out to be sub‑optimal and to protect taxpayers.

Now you’ve outlined in the Budget a framework, you’ve mentioned that today, but could you elaborate in a bit more detail, please, what these protections will be, what are the off‑ramps, why people should have confidence that their money won’t just go up in smoke.


Yeah. Thanks very much, Michelle, and for the opportunity to talk about what I think is a really important and really ambitious and substantial agenda.

The best way or the most prominent way to understand the off‑ramps that we’ve built into the design of our Future Made in Australia package is if you think about that $22.7 billion that we’re investing over the course of the next 10 years, the majority of that is production tax credits for renewable hydrogen and for refining and processing critical minerals.

Now in both of those instances, and you asked me about off‑ramps, in both of those instances the support that we are providing via the tax system has an end point, and so what we’re committing to there in the two biggest pieces by far of the Future Made in Australia package are production tax credits that end, when the market for these kinds of important minerals and energy sources is what people anticipate to be normalised.

And so, for example, when it comes to the hydrogen production tax credit, that ends in 2039–40. When it comes to the critical minerals production tax credit, similarly, that ends there. And that’s how we don’t saddle the Budget forever with these really important production tax credits. That’s the sort of off‑ramp that we have been working on and considering, and the sorts of off ramps that Danielle Wood and others have talked about in the past.


Andrew Clennell.


Treasurer, Andrew Clennell from Sky.

The Budget papers say, quote: the cash rate is assumed to gradually ease from around the middle of 2025 to reach 3.6 per cent by the middle of 2026. Do you agree with that no rate cut until mid‑2025, and given Steven Kennedy, who’s behind me is on the Reserve Bank Board, is 2.75 per cent inflation by Christmas a Steven Kennedy prediction or a Jim Chalmers prediction?


Well, on the first bit of your question, it’s a good opportunity to remind everyone that the interest rate assumptions in the Budget are just informed by the Bloomberg survey of market economists. The Treasury has to make an assessment, and Ben’s nodding because I’ve just given his employer a big rap in mentioning that we rely on the information from the Bloomberg survey. But the Treasury has to make an assumption about the future trajectory of interest rates, the fairest, most appropriate way to that is to let the survey of market economists inform that. So that’s the first part of your question.

On the inflation forecasts, of course that they are Treasury forecasts in the usual way that Treasury forecasts all elements of the economy for governments of both political persuasions. We don’t sit in our office and write the forecasts. The Treasury team of very professional, very diligent people do that work for governments of both political persuasions.

And what the Treasury forecasts recognise in a way that wasn’t possible because of the timing of the Reserve Bank forecasts, is that our Treasury forecasts for inflation factor in what we’re doing with the cost‑of‑living package and what we’re doing with the broader fiscal settings, and that is the main reason why they are anticipating that inflation will get back to the target band sooner than they were anticipating at Christmas time.


Mark Riley.


Treasurer, Mark Riley from the Seven Network. I want to ask about the decision not to means test the energy rebate, and the result of that being that the ultra‑rich get it, not just once, if they have 4 or 5 homes, they might get it 4 or 5 times, whacky‑doo.

Your explanation has been that the energy retailers are unable to identify people by income, and therefore, won’t be able to means test it. But haven’t they already done that, Treasurer, aren’t they doing that this year with people who are on low incomes and pensioners, and others, and isn’t that data with the ATO and with Centrelink, and can’t that be shared, and in the age of AI, quantum computing and future technologies, can’t we do that?


So, on the difference between the last energy bill rebates and the ones we announced last night, there is actually a difference between identifying people on pensions and payments, which was the targeting of the first one, and means testing by income.

It is actually a very different way of means testing and targeting. The two ways that you can do it with the existing systems are either people on pensions and payments, or the whole cohort, every household.

The ATO has tax information, but they have no arrangements to share that with energy retailers. We would have to change fundamentally the data sharing arrangements; that would take time and money in order to do that.

So the judgment that we made was that the most efficient way to give cost‑of‑living relief to people on low and fixed incomes, but also people on middle incomes, to provide that cost‑of‑living relief in middle Australia as well, was to provide it to every household.

People on the highest incomes are not our focus, they’re not our concern, but in the absence of re‑designing or designing a new system of data sharing and means testing amongst the energy retailers, we made the assessment that the best way to do it was to provide it broadly.

There are two elements to the cost‑of‑living package which are provided broadly; a tax cut for every taxpayer, and energy relief for every household, and there are elements of the cost‑of‑living package that are more targeted. Almost a million renters get Rent Assistance, people on the concession cards in the PBS get a longer freeze in the cost of medicines, students get debt relief. Two broad parts of the cost‑of‑living package and some targeting as well elsewhere.


David Speers.


Treasurer, thanks for your speech. David Speers from the ABC.

I just want to go to your Future Made in Australia plan. Treasury released this supporting paper last night alongside the Budget. This supporting paper from Treasury looks at the various elements of your Future Made in Australia plan. I think it’s fair to say it’s perhaps more enthusiastic about some areas than others.

For example, Treasury says when it comes to green hydrogen there is a strong case for producing green hydrogen in Australia, tick. It says Australia has significant potential to become one of the lowest cost producers of green metals, tick. It says when it comes to processing critical minerals, well, they may require public support, but when it comes to making solar panels and batteries in Australia, it points out, yes, there’s a lot of concentration with this in China, but the US, Europe, India, France, others are getting into this game, and if we have strong trade relationships with them, we should be fine. It does not say there’s a strong case to make solar panels and batteries in Australia.

So my question is, did you seek Treasury’s advice before you committed $1.5 billion to solar panel and battery making, and what was their advice?


Well, of course, in the normal process of advising us for the Expenditure Review Committee and the Cabinet, of course the Treasury provides advice. And I think what you see in that document is recognition that the kinds of investments that we are making are appropriate in one of two ways, or often in both of the two ways.

That paper that you have got in your hands there, I think that might be the only document I didn’t bring with me, separates the opportunities into two streams. So the first stream is the net zero stream, and the other stream is about economic resilience and national security, and different opportunities apply to the different streams.

But what you see in the package that we announced, the $22.7 billion of investment over 10 years, is recognition, in the magnitude of our investment, that some of these opportunities are further developed than others, and that reflects the commentary in that paper that you have there, and it reflects the Treasury advice.

You know, there were two opportunities, we think, clean renewable hydrogen and processing and refining critical minerals, which were ready and warranted production tax credits, for example. Some of the other technologies warrant a different combination of levers that we’re using, whether it’s ARENA innovation funding or some other ways, and that reflects the really quite detailed and considered work and thought that the Treasury put into finalising this policy that we released last night.


Poppy Johnston.


Thanks, Treasurer, Poppy Johnston from AAP.

At a time when we’re trying to lower energy costs as well as lower emissions, could the billions spent on power bill rebates have been better spent incentivising more households to install solar, EVs and electric appliances as some have suggested, and if not now, would you consider more help for household electrification down the track?


Yeah. Thanks, Poppy. I mean we have taken some decisions in earlier budgets to support the electrification of households and small businesses, and we’re proud that we have done that.

I think we collectively recognise that there is an opportunity to do more when we can afford to do that and where we can do that responsibly.

We have shown an appetite, and I shout out to my colleagues, Jenny McAllister and Chris Bowen and others, an appetite to support families and pensioners to make the transition at the same time as we get the whole economy to make this important transition and transformation as well.

And so, we are prepared to consider in the future any further steps that we may need to take on the front that you described, but we’ve also done some things already in earlier budgets.


Our next question is from Anna Henderson.


Anna Henderson, SBS World News.

It’s like we timed it, Poppy, because I also want to ask on that issue. The Biden Administration has just spent $7 billion putting solar panels on the roofs of low‑income households, and you’re one‑off energy bill rebates are going to cost $3.5 billion. Rewiring Australia has said you could help electrify every house household in Australia for $12 billion, it says that’s roughly what the government currently spends subsidising fossil fuels. So why did you go for the sugar hit when you could have had a long‑term cost reduction for the people, as you say, who are under the pump?


Well, the quickest, most meaningful way that we could provide relief was to provide that energy bill rebate for every household, but that hasn’t prevented us from moving really substantially and in an ambitious way when it comes to electrification, when it comes to renewables at the household level.

As I said in response to Poppy’s question, we’ve had initiatives in our first couple of budgets, which are about households, we’re had incentives for small business as well, and we have indicated, I think before, I hope before, because I’ve done it today, we have indicated an appetite and a willingness to consider in future budgets some of the proposals like that one that you described.


Charles Croucher.


Thank you, Treasurer.

You’ve called this a defining decade. It could also be called a decade of debt; a trillion dollars in the next two years, $26 billion a year interest payments moving forward beyond that.

Given Anthony Albanese has now left the room, has it crossed your mind that one day a Prime Minister Chalmers may regret Treasurer Chalmers not doing more when it comes to debt, and before you think that’s a compliment, I mean Annabel, Leo or Jack as Prime Minister, because that’s how long we’re going to be paying back this debt without structural change.


I think Prime Minister Annabel Chalmers is far more likely than this generation. You know, one of the things I’m proudest of in this Budget, and the first two budgets, and again I share credit with my terrific colleague in the front row here, one of the most meaningful differences that we have made in our time in office is to get that debt bill down really substantially.

In one year alone, this year, gross debt is $152 billion lower, next year it’s $183 billion lower. We’re avoiding $80 billion of debt interest repayments that the Jacks and Leos and Annabels and their generation would have to pay back.

And so I think if you made a list of the substantial achievements of Anthony’s government in the two years that we’ve been in office, at or near the top of that list would be this stunning turnaround in public finances that we have helped engineer, and the dividend from that, one of the consequences of that, is debt is much lower than it would otherwise be, and that means debt interest is much lower than it would otherwise be, and so that money can go to repairing the Budget further, or it can go to investing in our priorities, including some of these priorities which were in the Budget last night, and which your colleagues are asking me about today.


Patrick Commins.


Thanks, Treasurer. Pat Commins from the Australian newspaper.

You mentioned the pressure of unavoidable spending in the Budget. Does this include more generous Commonwealth funding with the states for schools and hospitals, and the problem with saying something’s unavoidable, it suggests other spending is avoidable. So maybe you can tell us what is the avoidable spending, and if unavoidable pressures are so intense, shouldn’t you be doing more to tackle those avoidable spending pressures?


Well, we have been, Patrick. I mean we’ve found $77 billion in savings and reprioritisations, and lest people hear that as a small amount of savings, I remind you again that the March 2022 Budget had zero dollars in savings. So, an extra $80 billion in savings, that’s hard work, and we take that really seriously.

Katy and I get asked all of the time: is this Budget going to be the Budget that’s really responsible and it’s got savings in it? And we say: no, every budget. We’re looking for more effective ways to invest public money, and $80 billion is a demonstration of our bona fides on that front, and there will be more in the future; in every budget there will be opportunities.

Whether it’s the way we make room in the investment pipeline in Defence, whether it is the savings that Katy’s been making in contractors and consultants, we have shown a willingness and an appetite and an ability to cut spending where we need to and redirect it.

When it comes to unavoidable spending, I mean, if you put yourselves in the shoes of an Expenditure Review Committee Minister, or a Cabinet Minister, and what sits before you often is a terminating program which literally no person in this room would consider to a temporary program.

The idea, for example, that myGov was only funded temporarily and that somehow we could have avoided paying to extend it beyond when it was budgeted to terminate, I mean that just doesn’t make any sense. And so a big part of the extra spending next year, a big part of the reason why the deficit is a little bit bigger next year than we anticipated at MYEFO is because of the kinds of spending that nobody in this room would want to try and avoid.


Katina Curtis.


Thanks, Katina Curtis from The West Australian.

There have been some over time, including previous heads of Treasury, who’ve said Australia’s not done very well at extracting a public cut for the use of the resources that, when they’re in the ground, everyone owns.

How, when you’re thinking about getting an entire new resources sector off the ground, how are you thinking about making sure that the public does get a fair cut from this new industry?


Well, our biggest priority in this regard is the PRRT legislation before the House and before the Senate, and that’s all about ensuring that our offshore LNG producers are paying more tax sooner to help fund our other priorities.

When it comes to these new opportunities, in renewable hydrogen and refining and processing critical minerals, our emphasis there in the tax system is making sure that we make the most of this opportunity, that we attract investment, and it goes back a little bit to Michelle Grattan’s question from much earlier in the questions and answers. Where we are providing those tax breaks and those incentives, we need to make sure that there’s an off‑ramp as well, and that’s we’ve built into the system.

I am confident, very confident, that the sort of industrial base that we are trying to recreate in this country will have a lot of benefits, good, secure, well‑paid jobs in suburbs and regions and that generation of prosperity. And if we get that right, there will be a benefit for the Budget as well.


Ben Westcott.


Ben Westcott from Bloomberg. Thanks for your speech, Treasurer, and thanks for reminding everyone about the great work that Bloomberg does.

In your Future Made in Australia plan, you have tax breaks for critical minerals and hydrogen starting in the 27–28 financial year. Now, when asked about that timeline previously, you’ve said that it needs time for the processing capabilities to ramp up. Now that’s obviously the case for hydrogen. But the critical minerals would already have some processing capabilities, they probably could do with a tax cut, tax incentive. Why not fund them now?


First of all, some of the challenges that we’ve got in critical minerals right now are at the mining end, and that is the consequence, as you know when we’ve talked about it before, is the consequence of the way that the market is responding to a heap more supply, and the way that that market is being managed by others.

So that’s the near‑term challenge, that’s primarily a challenge for mining rather than refining and processing. 2027’s not that far away, but the timing recognises that these two incentives that you’re asking about, they pay on results, they pay on production, they pay on scale and success. And we don’t yet have the kind of production right now that we’re talking about, trying to incentivise, and so 2027 strikes the right balance. It’s near enough to be meaningful, but it’s far enough way that it recognises that we are paying for scale and success and production, not for investment at the front end.


Chloe Bouras.


Thank you, Treasurer, Chloe Bouras from Network Ten. You said at the start of your speech that budgets get notoriously over‑simplified, so I’m going to ask you to simplify it instead. How will you measure the success of this Budget? Is it an interest rate cut; is it an election victory? Because those budget papers have election written all over them.


First of all, I don’t accept that last part of your question, and in fairness to you, Chloe, almost everybody of your colleagues and counterparts here have asked me a version of that question last night or in about a dozen or 15, interviews we did this morning.

I don’t see this Budget in political terms, and a lot of you have asked me, is this the last Budget of the parliamentary term? My answer to that is, I’m expecting to do another one, I’m happy to do another one. Katy and I are ready and raring to go for another one, already, we’ve already started thinking about next year’s Budget, the day after this one. But that’s in the hands of Prime Ministers.

We know our place in these kinds of considerations, and I will hand down a Budget on the day that my Prime Minister tells me to. I’m anticipating that it will be on this side of an election, but that is for him to decide.

You asked me what determines the success of this Budget. I determine the success of everything that we do as about two things: are we making life a little bit easier for people, and we are in this Budget; and are we positioning our people to be the big beneficiaries and not the victims of the way that the world is changing.

And, you know, all of us have a different reason for being here. My reason for being here is because I like to think about how the world is changing and how we make Australia the big winner out of that change. That’s what the Future Made in Australia package is all about, but that’s what really in one way or another all of our policies are about, beneficiaries of change rather than victims of change, and there’s a lot of anxiety, a lot of stress in our communities, a lot of uncertainty; the community that I represent, the communities that others represent in this place, and not even just on our side of the Parliament.

We know that people can be anxious and uncertain about the future, and our job as a government, in addition to helping people through difficult times and managing the pressures that they are under, is to maximise the opportunities of the future, and I judge that by our ability to keep people front and centre, to maintain our focus on real people in real communities, how they’re faring now and how their kids will fare in the future.


Paul Karp.


Thanks very much. The government’s own poverty experts called for a timetable to increase JobSeeker, but the Budget you’ve handed down shows there’s no increase when inflation is above target, no increase when inflation is back within the target, no increase when you deliver a surplus this year, and no increase when you deliver bigger deficits in following years.

You say you will consider it when it’s responsible to do so. So my question isn’t when, my question, please: what would the economy and Budget need to look like for you to further increase JobSeeker?


Thanks, Paul, for your question and for your interest in this over a long period of time, and you’re right that we have been able to implement some but not all of the recommendations of the Economic Inclusion Advisory Committee.

I think what’s missing from the question is recognition that we increased in a permanent way the JobSeeker payment in the last Budget, and not because we think that doing that in the last Budget necessarily solved all of the pressures that people on JobSeeker are under. We know that people are under pressure, and that’s why we’ve found so many different ways to provide cost‑of‑living relief to people who are vulnerable, people on low and fixed incomes and people on JobSeeker.

Whether it’s the energy rebate, whether it is the consecutive increasing now to the Commonwealth Rent Assistance, or all of the other ways; medicines and the like. We think that there is more than one way to help people who are vulnerable and people who are on low and fixed incomes. We have found multiple ways to do that across multiple budgets now, and we understand that good Labor governments with hard heads and warm hearts into the future will do what they can to always help the most vulnerable people in our society.


This next question from Finn McHugh will have to be our last unfortunately.


Thanks, Treasurer. Finn McHugh at Capital Brief. On this idea of forcing universities to stump up for accommodation if they want to take extra international students, that’s obviously got to be worked out with the sector over a period of time. I’m wondering what timeframe we’re looking at, what consultation’s already been done and how much blow‑back you expect from the sector.


We would like the universities to be willing partners in building more homes, in their case for students, and in our case for Australians more broadly. I think that there is a recognition that there’s a shortage of student accommodation and that is putting pressure on the housing market more broadly.

It’s not the only reason why there’s pressure on the housing market, but it’s a reason why there’s pressure on the housing market. And that’s why, when my colleagues negotiate with universities how we manage growth in this really important part of the economy, international education, a sector that I support really quite enthusiastically, but as we manage that growth in foreign students, to make sure as part of that, whether it’s some kind of formula, some kind of ratio, some kind of agreement, over a set period of time that we’re building more student accommodation to take pressure off the private rental market.

A lot of those details will be worked through with the sector, including the timing, and we hope and expect that together we can make a real difference when it comes to student accommodation.

To give you a sense of where this decision came from, and this is a bit more kind of context than I think the Budget papers or the press releases might provide. But you’ll recall, if you’ve followed the Universities Accord, that one of the ideas was about whether or not we tax or apply a levy to foreign students. And one of the reasons that was given for that levy was we could use that money then to build more student accommodation, and we think it’s more efficient, frankly, instead of taking that fee and then spending it on student accommodation and then having the universities manage it, is to say to the universities: if you want to bring a certain amount of foreign students, that’s good for you, it’s good for our community, it’s good for our economy. But it needs to be good for our housing market as well, and we’ll negotiate the best way to do that.


Ladies and gentlemen, please thank the Treasurer for speaking to us today.