Michelle Ananda-Rajah (Victoria, Australian Labor Party) | Link to this | Hansard source

As a member of the Senate committee examining productivity, I can say this has been a really excellent committee. We've heard a vast amount of testimony from right across the housing and construction industry on some of the problems associated with the building of more houses in Australia. It is a complex and wicked problem that has plagued successive governments over generations. But, as a government, we are not here now to admire this problem. The scale of it demands an ambitious and expansive response, because we have a situation now in Australia where an entire generation of young people have lost hope that they will ever own a home. We also have a situation where salaries have become completely decoupled from house prices. This has happened over a period of around 30 years, fuelled by the interaction between capital gains tax and negative gearing—add on 15 years of cheap credit, and the whole thing detonated. House prices raced away from incomes.

We have a situation where it takes somewhere between 10 to 13 times your median income to buy a home in Sydney. In Melbourne, it's a little bit better, but it's not that much better. It's nine to 10 times the median income to buy a home. This is clearly in the impossibly unaffordable range for most Australians, hence we have a generation of young people who have given up on the prospect of ever owning a home. But I want to say to those young people that we haven't given up—in fact, quite the opposite. We are doubling down on action to address this problem, and, given the scale of this problem, we are attacking it from every angle. We have to. And so we have a range of measures in a $47 billion Homes for Australia program.

I'm going to break this down. There's a lot to unpack with every single measure. It's not just about building homes, though, I might add. It's also about ensuring we have those tradespeople to build those homes. They're not built by machines; they're built by people. They've got to have the requisite skills. It also means that we need to ensure that the migrant workers we have here in Australia are actually working to top of scope so that, if they are tradies, they're not driving Ubers but instead working on construction sites. We also have to make sure that the construction industry has integrity and that workers are protected, because, as we learnt in this inquiry, this is a high-risk industry. It is high risk when it comes to occupational health and safety as well as mental health outcomes, which are very poor in this industry largely because of the type of work—manual, heavy, hard work—but also because it is very much male dominated, and these tend to be features of gender-segregated industries.

In terms of the key measures, I might talk to some of the ones that we've already brought through before I go to the taxation changes. We expanded the five per cent home deposit scheme towards the end of last year—I think it was October of last year—and we have seen, since coming to government, an additional 270,000 Australians enter homeownership, which means that they are paying their mortgage instead of someone else's mortgage. This is an unalloyed good. It is a good thing. Those opposite hate this scheme. They think it is 'middle-class welfare' because we removed income caps. I say to them that we removed income caps because income has become decoupled from house prices. We can't just stand back and admire this problem. We have to act. We have to give them a foot in the door.

We also launched another scheme which doesn't get anywhere near enough attention. It was voted down by the coalition like just about every single housing measure. It's called the Help to Buy scheme. Help to Buy is designed for people on very modest incomes, low incomes, and it enables them to get into a house with a two per cent deposit with the government taking somewhere between 30 to 40 per cent equity in their home. This is pitched to people who never in a million years thought they would ever own a home, and we have seen over 3,000 applicants for this program already. We also introduced the Housing Australia Future Fund, a $10 billion fund which the coalition hate and talk down at every turn. They want to abolish it, if they ever form government. The problem with that is this is a fund designed to build 55,000 social and affordable homes for key workers like nurses, teachers and emergency personnel—the people who help run this country, the people who are mission critical to running this country but those opposite hate. They hate the workers, and they hate the Housing Australia Future Fund. They voted against it. In fact, they tried to move a disallowance motion against the Housing Australia Future Fund in the Senate.

We have made some adjustments to taxation settings for Build to Rent. Build to Rent is a relatively new asset class in Australia, but it's very common elsewhere, and it's for institutional investors. This is where we bring foreign capital in; it mixes with domestic capital, and we build at scale. I've seen some of these completed developments in Melbourne, in Kensington, and they are very impressive. They are large-scale, very liveable spaces. They are bright, warm, modern, with sustainable materials. They have common spaces. The one I toured had a swimming pool. It had more than one gym, a yoga centre, a dance studio. It came with all the bells and whistles, and it was popular. People were renting out these apartments. Beautiful. A community secure, with a predominance of women because women felt safe in these kinds of developments.

For those people who are at acute risk of homelessness, we have introduced, and supported them with, back-to-back Commonwealth rent assistance increases. In this budget, we've also put in another $40 million towards modern methods of construction. This goes to modular housing—again relatively new in Australia, but it could be a complete game changer. It uses a pattern, a template, to build homes which, by definition, then become cheaper for consumers. There's no compromise on quality, but these become cheaper.

In terms of cutting red tape, we have paused the National Construction Code, and we're putting some work into converting that weighty document into something that can be enabled through AI, which will make it a lot easier for builders to navigate. Also on the topic of red tape, we have committed $47 million to working with subnational governments throughout this country, the states and territories, to help them implement the new environmental laws that we passed with the help of the Greens political party, voted against by the coalition.

The coalition parade around this country, talking about housing, how they care about young people, how they're so worried about the fact that they can't get a foot in the door and how they care about workers: 'Isn't it terrible that housing is so unaffordable? What a terrible job the government's doing!' But what they fail to tell Australians is that when they come into the peak decision chamber of this country, this parliament, they vote against every single measure to actually increase housing supply or enable Australians to get into houses with smaller deposits. It's utterly disingenuous. At every step we will call out your fraud.

I did say that houses are not built by machines; they're built by humans. We have a really ambitious program to train up more Aussies to encourage them to take up an apprenticeship in housing construction. To that end, we have a $10,000 Key Apprenticeship Program, the housing construction apprenticeship, which opened on 1 July last year and has already seen nearly 30,000 apprentices start in this trade. What could be better? These kids, these young people, will walk into jobs and they will be in secure jobs for a very long time because this government is committed to building.

We are going to build our way out of this crisis, and that does mean that we need to also have discussions in our local communities with those people who are resistant to change, the NIMBYs, the 'Not in my backyard' crowd. We need to be honest with each other that if we don't build, if we don't densify our cities in a sustainable, sympathetic way, we will never address this problem of housing affordability. That is not something this government will tolerate.

Lisa Darmanin (Victoria, Australian Labor Party) | Link to this | Hansard source

It's a pleasure to have recently joined this Select Committee on Productivity in Australia as deputy chair and a pleasure to work with Senator Ananda-Rajah, Senator Bragg and Senator McKenzie on the inquiry. In the packed agenda of five days of hearings that I've participated in already, we've examined a lot of serious issues, and this interim report that has been tabled today outlines some of those issues.

What I would say in terms of those of us on this side of the chamber is that what we say about productivity and, more importantly, what this government does in terms of productivity is really important to think about. This government is delivering the broadest productivity agenda that this country has seen since the 1990s. The 15 productivity reforms that have been progressed in this budget alone will help attract and absorb more investment, make it easier and quicker to build, and slash compliance costs when it comes to housing and infrastructure in this country. They will make a meaningful difference, cutting regulatory costs by $10.2 billion every year, and boost GDP by $13 billion.

By contrast, the Liberals and Nationals want to make people work longer and harder for less. As a consequence of their policies, Australia experienced the slowest decade of productivity growth in 60 years on their watch. Under the coalition, productivity growth fell for seven consecutive years in the lead-up to the pandemic, and the 2022 election coincided with the largest quarterly fall in productivity growth in more than four decades. If we want to talk about productivity and how we can deliver productivity in this country, then looking at what this government is doing in terms of action to turn around that massive decline is what we really need to be mindful of. And, of course, we know that productivity has been a longstanding challenge in our economy, and that's why it was such a focus of this year's budget.

I'd like to thank the senators, the witnesses who have appeared and those who have made a submission into the inquiry so far. I also want to acknowledge, as part of that, that we heard that, in terms of measuring productivity in this country, there is a challenge. Measuring productivity isn't just about building houses and infrastructure that you can easily measure. Measuring productivity in the non-market sector is just as important. If we think about Australia and Australia's future, the rise of the non-market sector is a larger and larger proportion of our economy, so we are going to need to consider how we measure in terms of productivity.

The inquiry so far has elicited that the current measurement that we use doesn't allow the same easy way of describing product input and then product out in the same way. For example, a nurse seeing more patients with the same number of hours—is that going to deliver a quality result or is that going to deliver a worse result for the health of our Australians? I do think that conventional measures don't always capture improvements in productivity, in quality, in wellbeing, in prevention and in other outcomes, meaning the value created by these sectors may be understated, particularly in the care sector. We also explored a little bit in the inquiry productivity and the costs to the environment, how those things are counted and measured, and what gaps there are in our current frameworks around those things.

Having said that, we know that the Albanese government has identified this decline as one of the biggest challenges facing our nation, which is why the Economic Reform Roundtable was convened in August 2025. One of the three main themes of this work was making our economy more productive a year ago. Following the roundtable, the Productivity Commission had completed inquiries into aspects of each of the government's five pillars of productivity which were identified. This work represents an ambitious reform agenda aimed at lifting productivity growth, boosting economic resilience and supporting higher living standards.

I'd also like to say that this question about productivity is also needing to be thought about within the global context and the geopolitical uncertainty that our country faces. In recent years, instability and global conflicts have directly affected housing construction in Australia by driving up material and energy costs, disrupting global supply chains and tightening financing conditions. These are all a factor in thinking about how we address the productivity challenge in our country. The pressures have increased the cost and complexity of delivering new housing, contributed to project delays and cancellations, and further constrained the capacity of the construction sector to respond to the strong demand for housing.

In particular, the government has prioritised what we can do within this context and taken strong action to shore up our fuel security, which is a key driver in delivering construction materials around the country. By investing in strategic fuel reserves and domestic storage capacity, Australia's exposure to the global supply disruptions and price volatility has been reduced, helping to moderate cost pressures across the construction sector. I will leave it there and seek leave to continue my remarks later.

Leave granted.

Andrew Bragg (NSW, Liberal Party, Shadow Minister for Housing and Homelessness) | Link to this | Hansard source

I will start by thanking colleagues who have already made statements this evening. From the government, I thank Senator Ananda-Rajah and Senator Darmanin. I've really enjoyed working with those senators, as well as with Senator McKenzie, on this committee. We had a lot of fun at the public hearings, but I'll move on to the serious matter of the productivity challenge that the country has.

We are living through a great decline in our nation, which is very regrettable, and our productivity trajectory is very poor. Yes, people can use speeches in this place to apportion blame to various people, but I think, in the main, it has been a bit of a bipartisan job. In relation to housing productivity in particular, we have had a serious problem, in that the bureaucrats have been allowed to run on autopilot and ministers of the day, potentially of both shades of government, have just let things happen without properly considering them.

The point of this interim report is to land a series of policy options on housing productivity. There are matters of finance and banking. There are matters of how the regulators are set up. Then, of course, there is the matter of the National Construction Code, which is probably the biggest lever the national government has in terms of determining how productive or unproductive the housing system might be. The National Construction Code is one of those things that every bloodsucker and every rent seeker has found a way to get their snout into. So what you've got is a National Construction Code which has ballooned from a couple of hundred pages 30 years ago to now 2,000 pages and it is effectively unreadable.

As a failed accountant and a very poor auditor, I take the view that, if a professional in an industry can't understand their own governing rules or has no chance of ever actually being able to read them, it's not a very good sign. I take the view that the 2,000 pages, which it has now ballooned to, are not a sign of health for the housing sector. Effectively, it is a punitive way to deal with people coming into the housing system. It says: 'You've got to have all this gold plating.' Everything has to be mandatory. You must have a house built as if you are disabled or as if you are wanting to have the most super-duper energy-efficient house known to humanity.

I think the general view is that the house should be—

Tim Ayres (NSW, Australian Labor Party, Minister for Industry and Innovation) | Link to this | Hansard source

It's awkward until the cladding is on fire.

Andrew Bragg (NSW, Liberal Party, Shadow Minister for Housing and Homelessness) | Link to this | Hansard source

I'll take the interjection. We want to have safe houses. It's very important that our houses are safe. It doesn't mean they need to be gold plated. The core recommendation for establishing a basic Australian standard is that a house won't burn down and won't fall down, but it won't be gold plated. That allows people to enter the market without having to pay for the house as if they are disabled and without all the additional so-called cladding. That is a very good model, and that is going to be the core of the debate going forward.

Deborah O'Neill (NSW, Australian Labor Party) | Link to this | Hansard source

Order, Senator Ayres.

Andrew Bragg (NSW, Liberal Party, Shadow Minister for Housing and Homelessness) | Link to this | Hansard source

Thank you for that protection. The government have failed to deliver any reasonable reform here in relation to the National Construction Code. This is an opportunity now for the nation to have a proper debate: do we want to allow people to build a cheap house, or do we not want to allow people to build a cheap house if they want to? Last time I looked, we lived in a free country and a free society, where people should be able to build a cheap house which is safe and secure, if they want to. So that is one of the core recommendations of this review.

I note with great regret the ability of rent seekers and parasites to inject themselves into the public policy process. That is what has happened in relation to this construction code. All the vested interests have made it uneconomic to build. One of the problems we have in this country is that it's very hard to make any money out of housing, so not many houses are being built. This is a way to lower the cost. If you want to have a super-duper energy-efficient house, then you can have that. That's in the report.

The second thing I'd say in relation to the massive problem of mortgage fraud is that we are now going to recommend that the consumer data right—

Government senators interjecting—

Deborah O'Neill (NSW, Australian Labor Party) | Link to this | Hansard source

Senator Bragg, please resume your seat for a moment. On this occasion, I'm not asking you to withdraw, but I am asking senators to comply with the standing orders and allow Senator Bragg to continue his remarks.

Andrew Bragg (NSW, Liberal Party, Shadow Minister for Housing and Homelessness) | Link to this | Hansard source

The second core point I wanted to make is around this consumer data right. I think it's been very clear that there is a lot of mortgage fraud going on in this country. It's fuelled by artificial intelligence. There are a lot of pieces of paper that fly around when people try and get a loan. If anyone has recently refinanced or tried to get a home loan, they would have found that it's effectively a paper based system. Artificial intelligence now allows people to make duplicates or completely fraudulent documents, so I think that having the CDR hooked up to the tax office in some way for verification is well worth looking at.

The other point we looked at in this productivity inquiry was the mandate of APRA, which I think is very focused, as it should be, on prudential safety. But it also makes sense for them to consider the impact of their macroprudential tools on the ability of people to get finance so they can get that elusive first home. We didn't make any commentary on their judgements in relation to macroprudential tools, but we did make the point that they should at least make them disallowable in such a way that the Senate could actually take one out if it thought it was unreasonable. And I make that point in relation to their limits on high debt-to-interest loans and also in relation to the serviceability buffer.

The report does deal with the productivity problem that the EPBC Act has created. Despite the government's best efforts, there are still 80,000 houses ensnared inside the EPBC Act. The fact that the minister of the day doesn't publish the decisions and the judgements that he makes about the approvals or the denials is a problem, because the people who are wanting to build houses have nothing to work with. There is no precedent, if that makes sense, so publishing what is effectively going to be a compliant development under the EPBC Act would, I think, aid people wanting to build houses in this country.

In the main, I think we had a very collegiate opportunity to identify some productivity problems in the housing system. We may not agree on everything, but in general I would say that more rules and more regulations have not made more houses, and as we face a significant housing deficit, I think we ought to look at the regulatory burden of the NCC. I note from the multiple interjections that there is perhaps a strong disagreement about where the final balance should lie, but I would have thought that we should try and give people the choice to build a cheap house, if that is their wish. We should also give people the choice to build additional properties and dwellings on their properties, whether they be above or whether they be granny flats or whether they be subdivisions.

Ultimately, we want to have more buildings to house our population. We want to maintain our ethos as a great migrant nation, but we also want to be able to house new Australians. So I think this is a—

I'm very happy to go into that. I do think that the serviceability buffer has probably been set too high, but that is not something that we as parliamentarians make a judgement on, as you know. In general, I do think that this suite of options gives the government some serious policy work that it needs, because the nation has a fundamental problem. I've tried not to be too political in this contribution, but the government is stuck on autopilot in its housing policies. What it needs is a refresh, because what it's been doing for four years hasn't worked.

I'll say as kindly as I can that the high-tax, high-regulation, high-corruption model has failed to give the houses that Australians need. Most of the government's interventions have ended up making the problem worse, not better. This is a report which gives them options on productivity in terms of the banking and finance component and in terms of the regulation component. There are many other things in there, but I would have thought that even my favourite environment minister, Minister Watt, could agree to the very kind recommendation we offered, which is that he should publish his judgements about the nature of compliant development so that people in future can see that that complies and that this doesn't comply. Hopefully, they'll then be able to provide more of the housing stock that Australians sorely need. I seek leave to continue my remarks later.

Leave granted; debate adjourned.