QUESTION:
Adrian Pisarski from National Shelter. Given the length of time you have identified it is going to take to address the issue and we agree with you this will take a while, do you think there is any chance of a bipartisan or multi-party approach to the issue and can we hold out hope for that given that it is likely to go beyond individual political cycles?
TREASURER:
Well that is my firmest hope and I am encouraged by the recent discussion that I have had with the State and Territory Treasurers. There are lots of issues that the state and territories and Commonwealth disagrees on when it comes to federal financial relations [inaudible]. But on this issue I have found a lot of common ground and that is across the political divide – Labor, Liberal, National. At state and federal level I think there is a will and good faith, at least with those who actually are in government who are charged with finding solutions to the problem and are held accountable for results. It always tends to focus your mind. I would hope here would be others in the political debate who would pick up on that sense of cooperation and engage with these broader issues. Look I am hopeful we will be able to get support for a number of measures that we obviously have under contemplation. I don’t want to overstate though - of course we said we were going to seek to address some of these issues in the Budget but people talking about centrepieces and these sorts of things, that’s not how I think about Budgets. I haven’t described it in those terms. It is one of many issues we are seeking to address. There are price pressures in health, there are price pressure in energy, price pressures in housing. What we need to do in the Budget is we need to ensure we continue to grow the economy because if we are not doing that then people’s wages aren’t going up and the capacity to deal with all these issues is diminished. We continue to have a strong fiscal consolidation program which means we can afford to provide a lot of the services and support we are talking about today but also to do things that drive pressure down on those prices. So look I am encouraged and I am always optimistic about this and I would encourage everyone in the room to encourage others to approach it that way, because you are right – you can’t fix it in one Budget or one budget cycle or one electoral cycle or one 24 hour news cycle which some would hope us to achieve. It won’t work that way and that mindset will just condemn future generations to worse outcomes.
QUESTION:
Thanks again for your time Treasurer. David Somek from Urbis. Under an optimal policy environment, what do you see as the role of the Commonwealth vis-a-vis the role of State and Territory Governments?
TREASURER:
The first word is partnership. Most of the levers dealing with supply as you know are held by State and Territory Governments. Working in partnership with those State and Territory Governments I think coordinates and provides some national leadership. As we have done on the Affordable Housing Taskforce that have been working out a bond aggregator model. We have more of a role to play that it comes to issues in the banking and financial system and our approach in that area has been to support the regulatory role taken by APRA and others. We think that is the scalpel approach, not the chainsaw approach. So our role extends right across that sphere but then because we fund in partnership many programs with State and Territory Governments, whether the NAHA, Commonwealth Rent Assistance [inaudible] in isolation. Whether it is how we treat the transfer payments which the Commonwealth is the principal provider of and how those are addressed to ensure more secure and affordable housing and tenure whilst supporting the certainty of income streams for investors, those are the things we can do in that area. But ultimately the State and Territory Governments have the supply levers. We also invest far more effectively with our current investment plans for infrastructure than we used to. Our City Deals, which Angus Taylor and the Prime Minister have been championing, this is a new way to think about infrastructure. One of the frustrations the Prime Minister and I have had about infrastructure in the past is it’s just been tip the money out the door, do a press release and let’s hope they build the road . That’s not national infrastructure planning and investment. What we are interested in is here’s a problem in a particular part, whether it is Western Sydney or suburban Melbourne or Brisbane or indeed Townsville, we are going to invest in this part of the project, what are you going to do? What is the local council going to do? Where is the school going to go? A place-based partnership. Not just at the broader national level of partnership but what is going to happen in Toongabbie, what is going to happen in Maribyrnong and how are we going to make that happen? Getting down to that level of detail with practical investments, because we all have levers but if we pull them all in the same way, for the same purpose, I think you get much better results.
QUESTION:
[Inaudible]
TREASURER:
Funding arrangements are contracts, they are partnerships. That means if you enter into one you have some expectation of the result. The Commonwealth can’t be just seen as an ATM for generic subsidies which you never see the results of. There’s not much point in officials sitting in Victoria and Canberra filling out endless reports that only they ever see. The sort of dash-board type approach which Mike Baird was championing and Gladys Berejiklian is continuing, about the outcomes for particular project investments and things like that so it have a public visibility. The Prime Minister is very passionate about these types of things as well. There needs to be greater visibility on our Federation and how it works together, rather than having the outcomes locked in reports that no one ever sees, and a lot of money is spent to write. It isn’t just a tick box for compliance. We actually want to know in that City Deal, did the other partners invest, did the houses get built, did the train station turn up, was the schedule put in place? That’s the accountability. Some of that has to be cultural and some of it has to be administrative and procedural, and I think that’s where we have to spend a lot more time. But I don’t really detect any great hesitation from others in the process. I don’t think officials enjoy producing these endless reports that they believe no one will ever read, any more than those who never get to read them. They want to see the outcomes as much as you do, and as much as I do, and most importantly as much as Australians do. Technology can help us incredibly with this approach, with the dashboard type approach on how to manage these things. It’s just not about what’s my share of the dough, it’s what’s the project, what’s the outcome, what am I investing in? That’s what a board would do when they consider an investment of shareholder funds. I see taxpayer funds the same way, I want an outcome, but I know the partner I’m working with wants one too, otherwise I wouldn’t do the deal.
QUESTION:
[Inaudible]
TREASURER:
When I talk about supply of affordable housing, I’m not just talking about greenfield sites on the fringes of metropolitan areas, I’m probably more talking about brownfield sites, I’m talking about infill, I’m talking about changes in the mix of accommodation, today I talked about the needs of family renters as well. The same is true for those who have the challenges of disabilities, and that there is an appropriate and accessible supply of accommodation for people facing those challenges at an affordable rate near the sorts of services. In my own personal circumstances, in my own family, I have a fairly keen understanding of this problem, knowing family members who are working in another part of the city, a long way from where they live, and how long it takes them to get there on the train. They get great support from people along the way, but the dedication and what is required to turn up to work when you’ve got to go through all of that is just amazing. The affordable supply of housing, when I refer to it I mean right across the spectrum. When it comes to disability accommodation, you’re dealing with another level of challenge. It may not be possible to use the institutional investment model to necessarily address those issues, or the deep subsidy public housing issues. What I’ve always found is if you can allow institutional investment in your broader policy settings to achieve scale and deal with the more mainstream challenges in affordable housing, well guess what, you’ve got more resources to deal with homelessness and an area that I’ve been particularly passionate about, which Michael and Zed know, and others would know that I’ve reviewed the National Partnerships on Homelessness on three occasions, and on those occasions I’ve said it has to focus on victims of domestic violence and it has to focus on young people, because that’s where I wanted to see some progress, and a focus of attention of that resource. The more we can get the mainstream challenge dealt with in the mainstream area of just normal commercial practice, the more public resource can go to solving the really, really hard problems.
QUESTION:
Treasurer, Danni Addison [inaudible]. Speaking from the Victorian perspective we have seen the government come out recently with its Homes for Victorians strategy which is 90 per cent fantastic and 10 per cent worrying in the sense that it very deliberately preferences first home buyers over investment with the changes to stamp duty concessions. Our view is that that may actually have a perverse impact on supply by limiting rental stock and the ability for investors to drive that market. Through that lens of good policy development that your team is looking to, could you look at ideas and the consequences and really understand where the market dynamics come into policy positions put forward in the Budget in May?
TREASURER:
You make an important point that you can’t look at any of these measures in isolation, as if it’s some sort of vacuum. You have to take into account the many other measures that are already out there and what impact they’re having. I’m aware of the comments that were made about the changes to stamp duty in Victoria. I was reasonably commentary of some of the changes that were made in Victoria, sometimes Tim is a hard guy to compliment, he still gave me a bit of grief for trying to compliment him but never-the-less it’s all in the good spirit of working together. Look people will raise those issues on stamp duty exemption that have potential to exacerbate prices because you put a lot of money straight into the market, but if that had been done without any supply response in Victoria then I would have really had more heightened concerns about that. To be fair to the Victorian Government they have also been looking at new developments and these sorts of things, and good for them for doing it. That should be acknowledged and I’m sure it has great support from Matthew Guy, and the team here in Victoria, because they want to solve that problem as well, and the more bipartisanship we have on that the better. But the point you make about understanding the broader policy environment and the mix there and when you are putting other measures, that’s why the collaboration is so important. That is why not looking at things as silver bullets or the litmus test of housing affordability policies if you change one tax, I just think that is a very one dimensional and unhelpful critique of the issue whether that has been made by politicians or whether its been made by commentators. As you know in this room because you research it, live it, you are involved in it, it is very complex and I think the issues are really starting to gel now between the states and territories and the Commonwealth and I hope by the end of it all we will see more collaboration, more alignment about what we are all trying to do. But there are some players that are missing in that. We talked about the community housing association sector. That needs to be developed. We have a wonderful community housing sector. Just in my electorate, St George Community Housing are one of the bigger ones in Australia with some 5,000 dwellings or thereabouts. That is a long way short of 95,000 like [inaudible] in the UK and I think there is more we can do in that space as they can play a role. Local governments need to look beyond just a short term transaction of that planning approval and the communities they are trying to make over time. Do they want, for example, just the cash of the planning concession that is provided or do they want a community centre built [inaudible], things that will actually make the whole development hum from a social and economic point of view. [Inaudible]
QUESTION:
Zoe Bettison, Minister for Social Housing, South Australia. I welcome you and your Cabinet’s interest in housing. It’s great that we are talking about this. You touched briefly on the National Partnership Agreement on Homelessness. I am keen to quarantine that money to make sure that agreement continues [inaudible] 2018. Can you talk a little more about your intentions for NPAH?
TREASURER:
I think my record on NPAH speaks for itself so I don’t think I have to elaborate much further on that at all. I have had good chats with Tom in South Australia about the housing affordability challenges there which are different. You are not experiencing the same pressures as they are in this city or in Sydney. There are roles I think particularly for cities like Adelaide in a national affordable strategy, a housing strategy I should stress,. Barnaby makes the point about the other options people have. I don’t think anybody should be forced to live anywhere they don’t want to live. Of course not. People should go to where they think their opportunities are and where their passions lie. That is fine. That is what we stand for as a government. But where there are options, if people can see opportunities for themselves in Adelaide or Tamworth or Bunbury or Townsville or Central Queensland well good, good. But what we have to understand though I think is that the weight of population policy and experience over [inaudible], not just decades, is that people will go to where the jobs are. People might simplistically say well we will do this or that about population growth. What I have seen when people have sought to do that is just as many turn up in Sydney or Melbourne but fewer people turn up in Adelaide, Tasmania and other parts of the country that are actually crying out for population growth. So its people who make those observations but the practical experience doesn’t really alleviate much pressure at all on Sydney and Melbourne but does create [inaudible] for other places. I know South Australia in particular is very passionate about growing the population of South Australia. Senator Birmingham and Christopher Pyne have been big advocates [inaudible]. When I was Immigration Minister I would have a lot of those discussions with South Australians. They want to see their state grow and want to see their population grow so that is I suppose, when you look at it in a national level, it reinforces the point I made in my presentation, there is no single housing market in this country. You do something here, it can impact differently over there and that is why you have to be so careful with macro, national interventions. They can have unintended consequences that we must seek to avoid. So the scalpel is better than the chainsaw but the issue is significant.
I am very pleased to have the opportunity here today to share that thinking. I welcome you to contribute in the weeks still to go before the Budget but of course when the Budget is out you will be able to make your observations then and I am sure they will be very fine.