Property Australia

A natural conversation

Ken Morrison Ken Morrison October 8, 2019

On Friday our state and territory treasurers gather to begin a conversation about what is needed to drive long term prosperity for Australia.

Federal treasurer Josh Frydenberg has placed productivity as a standalone agenda item, arguing that it “is a national task requiring a national conversation”. Both the NSW and Victorian treasurers have also been outspoken in their calls for a new round of productivity-boosting reform and investment

This is a conversation the Property Council has long been engaged in. Three years ago we released a federal incentives model for housing supply, prepared by Deloitte Access Economics. This outlined how governments could work together to enhance productivity while increasing housing supply.

The work was led by Professor Ian Harper (now a Reserve Bank board member), who was then fresh from chairing a root-and-branch review of Australia’s competition policy for the federal government.

Professor Harper’s research found that taking a productivity-focused approach to housing supply could unlock $3 billion in economic benefits and ease pressure on housing prices.

It argued that removing red tape and fixing clunky planning systems would encourage more investment, make the construction sector more productive and help cities as the “engines of productivity” unlock further economic growth.

Our paper proposed a five-featured model based on the successful National Competition Policy framework of the late 1990s to reward the states for making necessary planning reforms that would lift economic growth.

Treasurer Frydenberg wants to build a shared commitment to lift Australia’s productivity performance. A focus on housing supply is a good place to start.