Scott Morrison

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There are few real estate activities more depressing than observing a media debate about housing affordability.
It’s a downer because it’s clear from the rhetoric that this nation is unlikely to ever achieve any kind of resolution of the issue.
There are four reasons: (1) the politicians don’t understand it and/or are unwilling to do what’s needed; (2) industry people who do understand it champion their vested interests rather than the national interest; (3) everyone else has their heads full of misinformation, political agendas and unhelpful emotion; and (4) most discussions focus on Sydney prices and ignore the realities in other parts of Australia.
The outcome is mishmash of misconceptions, myths and outright lies. Nothing useful is ever achieved.
A recent discussion of ABS TV program The Drum was representative of how bad it gets. None of the people at the discussion table had any knowledge on the issue and simply indulged their prejudices and personal agendas. One spectacular twit claimed no one can get into the housing market any more because you need a $200,000 deposit to buy a typical house. Not even in Sydney is that remotely close to the truth.
The so-called affordability crisis is never far from the headlines and it stepped up in prominence this week with Federal Treasurer Scott Morrison declaring he was serious about fixing the problem. But of course he wasn’t serious at all. He essentially dumped the problem at the feet of state governments, with a generalised assertion that taking steps to increase dwelling supply will make everything better.
That’s one of the subject’s biggest furphies – a simplistic policy of lifting supply won’t force down prices unless the idea is to deliberately generate a major oversupply. One thing Morrison got right was his statement that you won’t fix the problem by crashing the market.
As a general observation, we don’t need more dwellings in Australia. We’re already building far too many apartments, which will result in falling values, but only in specific areas such as the inner-city unit markets of Melbourne, Brisbane and Perth, as well as surfside Gold Coast. This runs contrary to the statement by Malcolm Turnbull this week that “we simply haven’t been building enough dwellings” – which shows how little he understands about the situation.
Federal Labor responded with its standard party line that restricting tax benefits for investors will make housing affordable again – despite the assertion by leader Bill Shorten that his policy won’t cause house values to decline (so therefore how will it make housing more affordable?). And that, sadly, is the extent of his understanding of the issue.
There followed lots of finger-pointing, with each level of government blaming another level of government for the perceived problems, and each side of politics scapegoating their opponents.
Industry lobby groups leapt at the opportunity to advance their pet causes. Master Builders Australia agreed, naturally, that a big lift in new home construction would be the solution, but argued that politicians needed to make changes to make it really attractive for developers and builders. The Urban Taskforce declared that developers would be happy to build lots of affordable homes, just so long as government handed them plenty of financial incentives. 
As I’ve often commented, the biggest noise in real estate is always the voice of vested interest.
Even in Perth, where there is vast oversupply and high vacancies right across the metropolitan area, the Urban Development Institute of Australia urged the WA State Government to take steps to increase housing supply. 
To paraphrase Shakespeare, they were all tales told by idiots, full of sound and fury, signifying nothing.
The problem is that none of solutions put forward will make the required difference. They’re all targeting the wrong villains.
Everyone has a theory on who’s to blame for rising prices: some say foreign investors, others claim Australian investors, a few proclaim it’s first-home buyers pumped up by government incentives and still others, including former federal minister Bob Carr, reckon it’s the high level of overseas migration into Australia.
Who’s right? Well, none of them. The real culprits are never mentioned.
The biggest single force in driving house prices comprises the market sector known as next-time buyers –i.e. home-buyers other than first-home buyers. Numerically they’re the biggest chunk of the market and they’re aspirational. They have the financial capacity and ambition to pay top dollar to secure the property they’re obsessing over.
Investors, generally, don’t do that and first-timers can’t afford to.
But there’s an even bigger villain, one the politicians never mention while they’re busy pointing their fingers in various other directions - because the biggest problems are caused by the politicians themselves.
The value of homes in Australia is under-pinned by their replacement cost – i.e. the high cost of creating new house-and-land packages, the biggest chunk of which comprises taxes, fees and charges from all three levels of government.
As long as local, state and federal governments treat the housing industry as a beloved cash cow, housing will remain pricey in this country. Most of the state budgets handed down this year made the problem worse by adding to housing costs. 
You can build as many new houses as you like, but developers can’t sell them for $250,000 if they cost $400,000 to create.
Federal politicians recently conducted an inquiry into the affordability issue, which took a lot of time, cost of lot of money and achieved absolutely nothing. The Federal Government made a show of clamping down on foreigners illegally buying mansions, but that has changed nothing for first-home buyers 
Last year another inquiry was initiated by the House of Representatives economics committee but, according to reports this week, that has lapsed through lack of energy.
So where are we after all that “sound and fury”? Exactly the same place we were before Scott Morrison stepped up to the microphone – nowhere closer to any solutions.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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terryryder-YECXbqmri2

We don’t need more dwellings in Australia

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EXPERT OBSERVER
The Morrison government <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-09-04/pitt-committs-no-more-buybacks-creates-new-water-compliance-body/12627758" target="_blank">today</a> declared it will axe buybacks of water entitlements from irrigators, placating farmers who say the system has <a href="https://www.smh.com.au/politics/federal/murray-darling-water-woes-strip-another-100-jobs-from-drought-hit-rice-towns-20191126-p53e9k" target="_blank">damaged</a> their livelihood and communities.
Instead, Water Minister Keith Pitt says the government will scale up efforts to save water by upgrading infrastructure for farming irrigators in the Murray Darling Basin.
The move will anger environmentalists, who say water buybacks are vital to restoring flows to Australia’s most important river system. It also contradicts <a href="https://theconversation.com/recovering-water-for-the-environment-in-the-murray-darling-farm-upgrades-increase-water-prices-more-than-buybacks-145289" target="_blank">findings</a> from the government’s own experts this week who said farm upgrades increase water prices more than buyback water recovery.
The government has chosen a route not backed by evidence, and which will deliver a bad deal to taxpayers and the environment.
<img src="https://images.theconversation.com/files/356465/original/file-20200904-20-s3srfp.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="A farmer stands in the dry river bed of the Darling River"> The government will no longer buy water from farmers for the environment. Dean Lewins/AAP
<h2>A brief history of water buybacks</h2>
Farmers along the Murray Darling are entitled to a certain amount of river water which they can use or sell. In 2008, the federal Labor government began buying some of these entitlements in an open-tender process known as “buybacks”. The purchased water was returned to the parched river system to boost the environment.
In 2012, the Murray Darling Basin Plan was struck. It stipulated that 2,750 billion litres of water would be bought back from irrigators and delivered to the environment every year. The buyback system was <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2011-06-02/windsor-report-slams-murray-darling-authority/2742822" target="_blank">not universally supported</a> – critics claim buybacks increase water prices, and hurt farmers by reducing the water available for irrigation.
The Coalition government came to office in 2013 and adopted a “strategic” approach to water buybacks. These purchases were made behind closed doors with chosen irrigators.
In <a href="https://www.anao.gov.au/work/performance-audit/procurement-strategic-water-entitlements" target="_blank">a review</a> of these buybacks released last month, the Australian National Audit Office found many of these taxpayer-funded deals were not good value for money.
The federal government ordered the review after <a href="https://www.tai.org.au/sites/default/files/P959%20A%20little%20more%20valuation%20%255bWeb%255d.pdf" target="_blank">controversy</a> involving the 2017 purchase of water from two Queensland properties owned by Eastern Australia Agriculture.
The government paid A$80 million for the entitlements – an amount <a href="https://www.northerndailyleader.com.au/story/6898970/government-paid-almost-double-for-watergate-buyback/?cs=14480" target="_blank">critics said</a> was well over market value. The deal was also contentious because government frontbencher Angus Taylor was, before the purchase, a non-financial director of the company. The company also had links to the Cayman Islands tax haven.
<img src="https://images.theconversation.com/files/356468/original/file-20200904-20-1b3l01g.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="Keith Pitt speaks in Parliament as Prime Minister Scott Morrison watches on"> Water Minister Keith Pitt, pictured during Question Time, is the minister responsible for the new approach. Mick Tsikas/AAP
<h2>Infrastructure subsidies: a flawed approach</h2>
The Coalition government is taking a different approach to recover water for the environment: subsidising water infrastructure on farms and elsewhere. This infrastructure <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/4corners/cash-splash/11289412" target="_blank">includes</a> lining ponds and possibly levees to trap and store water.
The subsidies have cost many billions of dollars yet recover water at a very much higher cost than <a href="https://www.anu.edu.au/news/all-news/stop-wasteful-water-infrastructure-subsidies-for-mdb-%E2%80%93-study" target="_blank">reverse tenders</a>. This approach also reduces the water that returns to streams and groundwater.
 
The justification for water infrastructure subsidies is that they are supposedly less damaging to irrigation communities. But the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) concluded in <a href="https://www.agriculture.gov.au/abares/publications/insights/economic-effects-of-water-recovery-in-murray-darling-basin" target="_blank">a report</a> published this week that on-farm water infrastructure subsidies, while beneficial for their participants, “push water prices higher, placing pressure on the wider irrigation sector”. This is the very sector the subsidies purport to help.
So why would the government expand the use of water infrastructure when it costs more and isn’t good value for money? The answer may lie in this finding from the ABARES report:
<blockquote>
Irrigators who hold large volumes of entitlement relative to their water use (and are frequently net sellers of water allocations) may benefit from higher water prices, as this increases the value of their entitlements.
Farmers with limited entitlement holdings however may be adversely affected, as higher water prices increase their costs and lowers their profitability.
</blockquote>
In other words, the “big end of town” benefits – at taxpayers’ expense – while the small-scale irrigators lose out.
<h2>Missing water</h2>
Adding insult to injury, the Wentworth Group of Concerned Scientists released a <a href="https://wentworthgroup.org/2020/09/mdb-flows-2020/2020/" target="_blank">detailed report</a> this week showing the basin plan is failing to deliver the water expected, even after accounting for dry weather. Some two trillion litres of water is not in the rivers and streams of the basin and appears to have been consumed – a volume that could be more than <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-09-03/the-mystery-of-the-murray-darlings-vanishing-flows/12612166?nw=0" target="_blank">four times</a> the water in Sydney Harbour.
The Wentworth Group says stream flows may be less than expected because environmental water recovery has been undermined by “water-saving” infrastructure, which reduces the amount of water that would otherwise return to rivers and groundwater.
This infrastructure, on which taxpayers have spent over A$4 billion, has not had the <a href="https://www.sciencedirect.com/science/article/pii/S092134492030077X" target="_blank">desired effect</a>. Research has found those who receive infrastructure subsidies increased water extractions by more than those who did not receive subsidies. That’s because farmers who were using water more efficiently often planted thirstier crops.
<img src="https://images.theconversation.com/files/356467/original/file-20200904-24-1orkxk5.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="Dusk at Menindee Lakes in the Murray Darling Basin"> The government took a strategic approach to water buybacks in the Murray Darling Basin. Shutterstock
<h2>We deserve better</h2>
It’s clear taxpayer dollars are much better spent buying back water entitlements, through open tenders, rather than subsidising water infrastructure. We can, and must, do <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/1467-8489.12288" target="_blank">much better</a> with water policy.
Today, the federal government has doubled down on wasteful spending at taxpayer expense – in a time of a COVID-induced recession.
So what is on offer from the Morrison government? Continuing to ignore its own experts’ advice and delivering yet more ineffective subsidies for water infrastructure. Our rivers, our communities, and all Australians deserve much better.
<a href="https://theconversation.com/profiles/quentin-grafton-1941" target="_blank">Quentin Grafton</a>, Director of the Centre for Water Economics, Environment and Policy, <a href="https://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292" target="_blank">Crawford School of Public Policy, Australian National University</a>
This article is republished from <a href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/morrison-government-plan-to-scrap-water-buybacks-will-hurt-taxpayers-and-the-environment-145613" target="_blank">original article</a>.
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jrobinson-rf4aSBido9

Morrison government plan to scrap water buybacks will hurt taxpayers and the environment

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GUEST Observation
Our governments are <a href="https://theconversation.com/its-just-started-well-need-war-bonds-and-stimulus-on-a-scale-not-seen-in-our-lifetimes-137155" target="_blank">committing taxpayers to further debt</a> as part of a planned recovery from the economic impacts of the coronavirus pandemic. Infrastructure spending is great for economic stimulus, but it has to be the right kind of infrastructure.
These are some of our largest public investments, so we want this public money to work a lot harder to create multiple rather than just singular benefits. As well as quickly providing jobs and the economic benefits of solving the problems of transport or energy supply, stimulus projects need to deliver broad, long-term community value, <a href="https://theconversation.com/as-coronavirus-widens-the-renter-owner-divide-housing-policies-will-have-to-change-135808" target="_blank">reduce inequality</a> and help <a href="https://theconversation.com/sorry-to-disappoint-climate-deniers-but-coronavirus-makes-the-low-carbon-transition-more-urgent-135419" target="_blank">counter climate change</a>.
The focus of <a href="https://www.smh.com.au/politics/federal/scott-morrison-flags-company-tax-cuts-ir-reform-as-key-to-covid-19-economic-recovery-20200417-p54kvq" target="_blank">fast-tracked infrastructure spending</a> in the pandemic recovery should be many smaller-scale projects that provide these broader benefits. Hence these projects will provide greater value than the <a href="https://investment.infrastructure.gov.au/" target="_blank">transport mega-projects</a> that had already been <a href="https://theconversation.com/government-to-inject-economic-stimulus-by-accelerating-infrastructure-spend-127358" target="_blank">proposed for economic stimulus</a>.
For example, the <a href="https://www.smh.com.au/politics/federal/labor-backs-economic-game-changer-high-speed-rail-as-part-of-pandemic-recovery-20200418-p54l24" target="_blank">high-speed rail project</a> Labor has proposed will help decarbonise travel, but it won’t provide enough jobs in the short or medium term. Major road projects will cut commuting time for some drivers, but won’t provide widespread benefits or longer-term employment. New roads also increase emissions and often damage neighbourhoods.
<h2>Good infrastructure delivers broad benefits</h2>
Infrastructure projects are such significant economic engines they can incorporate community improvement without compromising their other outcomes.
The ways in which projects get planned and implemented hold the key. For example, projects should involve local businesses, give hiring preference to long-term unemployed people and use sustainable materials.
Infrastructure planning can integrate multiple functions. For example, water-management infrastructure (for drainage or flooding) can be designed to include open space, tree cover, recreation and cycleways. Streets can be designed as beautiful public spaces that include pedestrians, cyclists and cars, as well as tree canopy and water storage.
Good infrastructure used for employment creation and economic recovery looks like <a href="https://www.britannica.com/event/New-Deal" target="_blank">Roosevelt’s New Deal</a> of the 1930s. These programs created a legacy of high-quality public infrastructure across the United States.
A “Green New Deal” approach in Australia could focus on smaller-scale projects, including:
<ul>
<li>
<a href="https://theconversation.com/physical-distancing-is-here-for-a-while-over-100-experts-call-for-more-safe-walking-and-cycling-space-137374" target="_blank">infrastructure to promote walking and cycling</a>
</li>
<li>
tree planting to <a href="https://theconversation.com/a-solution-to-cut-extreme-heat-by-up-to-6-degrees-is-in-our-own-backyards-133082" target="_blank">reduce heat and store carbon</a>
</li>
<li>
<a href="https://theconversation.com/drought-fire-and-flood-how-outer-urban-areas-can-manage-the-emergency-while-reducing-future-risks-131560" target="_blank">land-management strategies to reduce fire and flood risks</a>
</li>
<li>
<a href="https://theconversation.com/coronavirus-and-the-economy-we-need-green-stimulus-not-fossil-fuel-bailouts-133492" target="_blank">renewable energy infrastructure</a> of all kinds
</li>
<li>
<a href="https://theconversation.com/we-dont-know-what-weve-got-till-its-gone-we-must-reclaim-public-space-lost-to-the-coronavirus-crisis-135817" target="_blank">improvements to public open spaces</a>
</li>
<li>
<a href="https://theconversation.com/why-the-focus-of-stimulus-plans-has-to-be-construction-that-puts-social-housing-first-136519" target="_blank">retrofitting and enhancing schools</a>
</li>
<li>
<a href="https://www.greenway.org.au/" target="_blank">multipurpose greenways</a>.
</li>
</ul>
This greenway traverses Sydney’s Inner West municipality.
These types of projects are fast to get going and labour-intensive. They can be implemented in both cities and regional areas. These projects can also build longer-term employment capacity and help with the transition of workers out of fossil fuel industry jobs.
<h2>Bigger isn’t necessarily better</h2>
The largest infrastructure projects, like those being proposed, are the riskiest in terms of <a href="https://theconversation.com/spectacular-cost-blowouts-show-need-to-keep-governments-honest-on-transport-66394" target="_blank">cost blowouts</a> and often deliver limited social and environmental value. In many instances their <a href="https://www.propertyobserver.com.au/https://www.jstor.org/stable/23607068?seq=1" target="_blank">claimed economic value is also doubtful</a>, as their costs are modelled inaccurately and their benefits and use are often vastly exaggerated.
One cause of cost blowouts is that governments are often reluctant to commit to spending in the early stages of major projects. This means commitments are often <a href="https://theconversation.com/missing-evidence-base-for-big-calls-on-infrastructure-costs-us-all-99080" target="_blank">made before projects are well enough understood</a>. Early spending to explore alternatives, understand impacts and consult widely can often <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/j.1745-5871.2009.00606.x" target="_blank">realise projects more quickly and with more predictable outcomes</a> that better serve the public interest.
The Morrison government is promoting the myth of fast-tracking through the cutting of <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-04-25/coronavirus-eeconomy-reforms-usual-suspects/12182786" target="_blank">red tape</a> and <a href="https://www.theguardian.com/australia-news/2020/apr/23/coalition-is-aiming-to-change-australias-environment-laws-before-review-is-finished" target="_blank">green tape</a>. This is not the key to faster project delivery. We have a decent system of development regulation, which attempts to balance the business interests of developers against the public good. The current crisis has illustrated very clearly the importance of the public values of <a href="https://theconversation.com/coronavirus-reminds-us-how-liveable-neighbourhoods-matter-for-our-well-being-135806" target="_blank">liveability</a>, <a href="https://theconversation.com/a-major-scorecard-gives-the-health-of-australias-environment-less-than-1-out-of-10-133444" target="_blank">preserving natural resources</a> and <a href="https://theconversation.com/physical-distancing-is-here-for-a-while-over-100-experts-call-for-more-safe-walking-and-cycling-space-137374" target="_blank">easy access to open space and local centres</a>.
We must hold all our infrastructure projects to higher standards. Robust planning and <a href="https://theconversation.com/cutting-green-tape-may-be-good-politicking-but-its-bad-policy-here-are-5-examples-of-regulation-failure-137164" target="_blank">environmental regulation are crucial</a> to maximise the public benefit of projects. Effective <a href="https://theconversation.com/sidelining-citizens-when-deciding-on-transport-projects-is-asking-for-trouble-92840" target="_blank">community engagement ultimately leads to smoother implementation</a> and better outcomes. Projects that work within planning regulations <a href="https://www.thefifthestate.com.au/urbanism/planning/fast-tracking-development-in-nsw-genuine-reform-or-rent-seeker-give-away/?ct=t%2821+april+2020%29" target="_blank">move more swiftly into implementation</a> than projects that try to bypass them.
In this pandemic crisis we have seen governments move fast and effectively to change policy and implement large-scale programs to benefit the community. The economic rebuilding forced on us by the pandemic is an opportunity to show the same agility to rethink our approach to infrastructure as an engine to uplift our communities and improve life for all citizens.<img src="https://counter.theconversation.com/content/136838/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/elizabeth-mossop-1040691" target="_blank">Elizabeth Mossop</a>, Dean of Design, Architecture and Building, <a href="https://theconversation.com/institutions/university-of-technology-sydney-936" target="_blank">University of Technology Sydney</a>
This article is republished from <a href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/the-pm-wants-to-fast-track-mega-projects-for-pandemic-recovery-heres-why-thats-a-bad-idea-136838" target="_blank">original article</a>.
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j.ballantyne1990-6AQqhLzZaK

The PM wants to fast-track mega-projects for pandemic recovery. Here's why that’s a bad idea

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GUEST OBSERVATION
In a country as dry as Australia, surely it is a no-brainer that we have in place a coordinated, national drought response that can be rolled out the same way that the Natural Disaster Relief and Recovery Arrangements are triggered when the country experiences cyclones, floods or bushfires.
Drought used to be part of these arrangements but, for good policy reasons, was removed in 1989.
Our last attempt at national drought policy
Once upon a time, Australia had a national drought policy. It was enacted in 1992 following a comprehensive review and report by an independent panel, the <a href="https://www.propertyobserver.com.au/https://trove.nla.gov.au/work/6206176" target="_blank">National Drought Policy Review Task Force</a>, and detailed negotiations between Commonwealth and state ministers and their officials.
The policy included commitments by both state and Commonwealth governments to implement a coordinated and comprehensive package of programs covering drought preparation and response.
At the Commonwealth level, these measures were centred around:
<ul>
<li>
the controversial “exceptional circumstances” provisions of its revised <a href="https://onlinelibrary.wiley.com/doi/10.1111/j.1467-8500.2006.00483.x" target="_blank">Rural Adjustment Scheme</a>, which were aimed at supporting farm businesses by subsidising up to 100% of the interest paid on commercial loans.
</li>
<li>
a farm household support scheme that provided short-term income support to farmers and also offered grants for those who decided to leave the land.
</li>
<li>
farm management bonds, later known as <a href="https://www.ato.gov.au/Business/Primary-producers/In-detail/Farm-management-deposits-scheme/" target="_blank">farm management deposits</a>, that allowed farmers to set aside pre-tax income they could later draw on in times of need.
</li>
<li>
a drought relief payment (added to the policy in 1994) that provided income support for farmers in areas declared to be experiencing “exceptional circumstances” drought. By May 1995, <a href="https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/RP9596/96rp06" target="_blank">over 10,000 families</a> were accessing this payment every month.
</li>
</ul>
Flaws in the policy
As anyone familiar with these programs will know, the exceptional circumstances program was plagued by problems.
The first was the lack of clarity around defining when a drought moved from a “normal” situation that was expected to be managed by farmers, to an “exceptional” situation with which even the best manager could not be expected to cope.
The definition of an “exceptional circumstances” drought became the subject of ongoing debate, along with concerns that drought assistance was based on administrative boundaries, leading to inequities that became known as the <a href="https://books.google.com.au/books?id=EC_ubyzIecUC&amp;pg=PA59&amp;lpg=PA59&amp;dq=australia+drought+%22lines+on+maps%22+problem&amp;source=bl&amp;ots=Xt_qqiXXkc&amp;sig=ACfU3U3WoO17x1bFqBhucrPqvrQtiVGMYQ&amp;hl=en&amp;sa=X&amp;ved=2ahUKEwia3aeAno7lAhVpILcAHTEeCC0Q6AEwAHoECAgQAQ#v=onepage&amp;q=australia%20drought%20%22lines%20on%20maps%22%20problem&amp;f=false" target="_blank">“lines on maps” problem</a>.
The second issue was the amount of information farmers were required to provide in order to demonstrate eligibility for “exceptional circumstances” assistance. The process was considered onerous and time-consuming.
Amid these concerns, a comprehensive review of drought policy was conducted in 2008 by the <a href="https://www.pc.gov.au/inquiries/completed/drought/report" target="_blank">Productivity Commission</a>. This was accompanied by a <a href="http://www.bom.gov.au/climate/droughtec/ec-report.pdf" target="_blank">report</a> by the Bureau of Meteorology and CSIRO on the likely impact of climate change on the frequency and severity of droughts in Australia, and an independent report on the <a href="http://www.agriculture.gov.au/ag-farm-food/drought/drought-policy/history/dryness-report" target="_blank">social impact of drought</a>.
Following the review, the government decided to end the “exceptional circumstances” program in 2009. This effectively gutted the national drought policy.
Since then, there has been no further attempt at developing a comprehensive, predictable drought policy response from the federal or state governments. There have been intergovernmental <a href="http://www.agriculture.gov.au/ag-farm-food/drought/drought-policy/national-drought-agreement" target="_blank">National Drought Agreements</a>, but these have done little more than restate the principles underpinning the country’s drought policy since 1992.
In recent years, the Coalition government has appointed a drought envoy, Barnaby Joyce, and drought coordinator-general, Stephen Day, to study the impact of drought on farmers and recommend possible solutions, but we have <a href="https://www.theguardian.com/australia-news/2019/sep/23/labor-calls-for-release-of-drought-envoy-reports-barnaby-joyce-says-he-sent-via-text" target="_blank">yet to see what either has come up with</a>.
Providing meaningful, timely and predictable support
Much of the criticism levelled at the government’s response to the current drought relates to its ad hoc and knee-jerk nature. This reactive way of dealing with drought highlights the need to return to a more predictable approach. This would avoid <a href="https://www.news.com.au/technology/environment/disbelief-over-1-million-funding-as-moyne-shire-locals-deny-they-are-in-drought/news-story/d82ba5220872e2d291f898cbe70f3e6a" target="_blank">perceptions of pork barrelling</a> and provide certainty to farmers about what support is available and under what circumstances.
A new national drought policy needs to take several forms. First, it needs to support farmers to prepare for drought before it happens. This is one area where the current policy has been moderately successful.
As of August 2019, Australian farmers had set aside a total of <a href="http://www.agriculture.gov.au/ag-farm-food/drought/assistance/fmd/statistics" target="_blank">$5.809 billion in farm management deposits</a>. These deposits have encouraged farmers to manage financial risk by building up cash reserves in high-income years, which they could then use during times of drought.
Individual farmers can currently hold a total of $800,000 in deposits. One possible improvement is to raise the ceiling on annual deposits in the years following drought recovery to allow a rapid rebuilding of cash reserves.
Second, a strong drought policy needs to provide support to all farmers during drought, not just those who have accumulated sufficient deposits to help them ride out the lean years.
In recent years, many farmers have taken advantage of long-term, low-interest loans to help during drought, and some have called for <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/rural/2019-10-07/farms-push-for-interest-free-drought-loans/11574552" target="_blank">zero-interest loans</a> to be made available, as well. But loans are not an ideal solution, as repayments are generally required even when farm incomes remain low.
An alternative to low- or no-interest loans are <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/1467-8489.12213" target="_blank">income contingent loans</a>. Similar to the <a href="https://www.studyassist.gov.au/help-loans/hecs-help" target="_blank">HECS-HELP scheme in higher education</a>, these types of loans only require repayment when the borrower can afford to do so.
This would not only give farmers greater flexibility when it comes to repayment, it would also greatly reduce the extensive red tape that strangled the old “exceptional circumstances” scheme.
Third, we need a serious rethink of the way we provide income assistance to farmers in a broader sense. Providing income support to farmers who are asset-rich, for instance, raises questions about fairness when compared with poor people in cities who are struggling to get by on Newstart payments.
This imbalance has come into stark focus in recent weeks, particularly on social media, as government ministers have discussed the introduction of <a href="https://www.smh.com.au/national/nsw/dole-drug-tests-demonise-the-needy-20190906-p52okv" target="_blank">drug testing for Newstart recipients</a>, and in the <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-09-09/farm-household-allowance-on-cashless-welfare-cards-no-problem/11492590" target="_blank">debate around the Indue card</a>.
There has been <a href="https://theconversation.com/farm-poverty-an-area-of-policy-aid-built-on-sands-of-ignorance-23756" target="_blank">no serious attempt in the past 45 years</a> to measure the extent of poverty among farmers. We can develop more appropriate and equitable income-support policies if we can better understand the genuine nature of their need.
The elephant in the room
While the government has assiduously avoided making the link, an effective national drought policy also cannot be divorced from discussions about climate change.
The 2008 Productivity Commission report was pretty clear in its conclusions about the impact of climate change on drought in Australia. A growing number of farmers are now <a href="http://farminstitute.org.au/publications/research_report/change-in-the-air" target="_blank">acknowledging this reality</a>. Denying the need for serious consideration of climate change is not doing our agricultural producers any favours.
Developing an effective national drought policy is hard work. But in another sense, it should also be easy. This is because, unlike many other areas of government policy, it can be bipartisan.
Although the National Party has historically been aligned with rural voters, all parties are broadly sympathetic to farmers and value their contributions to the economy and, importantly, our national identity. The public also generally <a href="https://csrm.cass.anu.edu.au/research/publications/parched-rural-australia-thirsty-solutions" target="_blank">regards farmers positively</a> and is responsive to their plight when they are faced with hardship.
As such, this should be one area where our politicians can come together to develop a coherent national response — one that is known in advance, forward-looking, equitable with other income-assistance programs in the community, and provides meaningful support before, during and after drought.<img src="https://counter.theconversation.com/content/124775/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Linda Botterill, Professor in Australian Politics, University of Canberra.
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/a-national-drought-policy-should-be-an-easy-bipartisan-fix-so-why-has-it-taken-so-long-to-enact-a-new-one-124775" target="_blank">original article</a>.
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A national drought policy should be an easy, bipartisan fix. So why has it taken so long to enact a new one?

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A number of happy Sydney auction sellers are reaping the real estate rewards of the Morrison Government’s surprise federal election victory.
In a market rebound being dubbed “The ScoMo effect”, homes which had recently been passed in during the two-year housing slump sold at a price almost $400,000 higher just seven weeks later in light of record low interest rates, a loosening of lending regulations and the vital removal of the threat of Labor negative gearing and capital gains policies set to punish investors, owners and renters.
Economists factoring a Labor victory into their housing forecasts for the winter outlook said Prime Minister Scott Morrison’s re-election had removed a massive negative facing an already jittery property market.
“Given the difficulty in predicting the election, our house price forecasts had allowed for a 50 per cent probability (i.e. 50/50 Labor would win) of an 8 per cent additional drag on prices in Sydney,” AMP chief economist Shane Oliver said. “Now it’s zero and we need to remove this from our forecasts.”
Ray White selling agent Shaun Burro pointed to a massive spike in auction clearing rates as “a complete U-turn” in the market.
The May 18 election day clearance rate sat at around the low 60s and is now often in the 70s, with a 78 per cent success rate advised last Saturday. The rebound was illustrated in an unrenovated three-bedroom Redfern terrace (below) passed in at $1.6 million on the actual day of polling.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/15/50%20Thurlow%20Street%20Redfern.jpg" alt="">
A buyer emerged earlier this month paying $1.971 million, reflecting a $370,000 jump in just seven weeks.
Buyers’ agent Rodney McLoughlin at TBAS Buyers Agents was at the original auction. “Up to the election outcome, we were witnessing one, maybe two active bidders at auctions, with properties likely selling around the agents’ price guide,” he said.
However, the post-election auctions are attracting three to four active bidders, with properties often selling around 10 per cent over the price guide, he said. “Exceptional properties are now selling around 15 per cent over the agents’ guide,” he said.
Mr Oliver also cited the action under the hammer as evidence of the ScoMo effect.
“So far it’s mostly evident in the auction market as other data comes out with a much longer lag,” he said.
“Auction clearances may relate to only a portion of the market but they are usually a pretty good guide to the broader market.”
SQM property research analyst Louis Christopher said there are more buyers in the market compared to the time prior to the election, citing the win, APRA announcing their loosening lending and the interest rate cuts as the three main factors.
Kellyville couple Clive and Jeanette Desira are attempting to capture on the heightened auction confidence with a July 31 marketing campaign with Ray White Castle Hill to sell their five-bedroom Springwood Boulevard (below) home.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/15/69%20Springbrook%20Kellyville.jpg" alt="">
The home, built by the couple on a 605sq m block in 2015, was listed before the election without success but Mr Desira is now feeling more optimistic.
“I think the market has changed,” Clive said.
“There’s a little bit more confidence since the return of the government, plus lower interest rates and also the changes in the way banks assess loans.
“I believe buyers’ confidence is back. I think we’ll see stock moving.”
CoreLogic’s June home value index revealed Sydney’s prices rose 0.1 per cent last month — the first month without a price fall in two years.
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jchancellor-FAypfDUnLy

The ScoMo effect on Sydney's auction clearance rates

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EXPERT OBSERVER
<a href="http://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292"></a>
Albo, or Plibersek, or whoever it turns out to be the next Labor leader, might have had a lucky accident. Usually, it’s Labor that inherits an economy turning down.
This time, it’s the Coalition. And because of regular updates from the Reserve Bank and the Bureau of Statistics strikingly at odds with their public position that the economy strong, they ought to be finely attuned to it.
Economic growth, the catch-all that is supposed to show us where the economy has been and where it is headed, is frighteningly small.
The treasury’s best estimate of potential growth – how strongly the economy could be growing over time if things were well managed – is <a href="https://www.smh.com.au/business/the-economy/myefo-treasury-downgrades-its-budget-projections-20151124-gl6mfd" target="_blank">2.75% per year</a>.
The reality, for the two most recent quarters for which we have data, is <a href="https://www.propertyobserver.com.au/http://www.abs.gov.au/ausstats/abs@.nsf/mf/5206.0" target="_blank">0.3% and 0.2%</a>.
<h2>The economy is anaemic, despite the crowing</h2>
If you add those two numbers together and multiply by two you discover that for six months the economy has been growing at an annualised pace of just 1% – way, way short of its potential.
Stripping out population growth and minimal price growth, real living standards have been going backwards.
The result of what the Reserve Bank describes as “<a href="https://www.rba.gov.au/publications/smp/2019/may/pdf/domestic-economic-conditions.pdf" target="_blank">persistently slow growth in household incomes and declining housing prices</a>” has been something of a strike in consumer spending. The real value of spending per household hasn’t been falling, but it hasn’t really been climbing either.
The bank says consumption growth has slowed most noticeably for discretionary items that tend to have the strongest relationship with home buying, such as furnishing and household equipment. It says growth in other types of discretionary spending, such as eating out, has also slowed. Consumption of so-called “essential” items is holding up.
<h2>We’re going to need a boost</h2>
It means we can’t rely on household spending to revitalise the economy (although the government will give it a go, stumping up a bonus of <a href="https://theconversation.com/its-the-budget-cash-splash-that-reaches-back-in-time-114188" target="_blank">as much as $1,080</a> to be delivered with each tax return from July in a much-needed boost that will be disguised as a <a href="https://theconversation.com/election-tip-23-9-is-a-meaningless-figure-ignore-the-tax-to-gdp-ratio-115432" target="_blank">tax cut rather than spending</a>).
Household spending accounts for three-fifths of gross domestic product. The bank identifies uncertainty over household spending, which itself derives from uncertainty over income growth, as a “<a href="https://www.rba.gov.au/publications/smp/2019/may/pdf/economic-outlook.pdf" target="_blank">key risk</a>” for economic growth:
<blockquote>
Should households conclude that low income growth will be more persistent than previously expected, households may adjust their spending by more than currently projected and consumption growth could remain weak for a longer period
</blockquote>
Labor would have helped stabilise uncertainty over income growth by immediately intervening before the Fair Work Commission to get higher wages, directing it to draw up a long-term strategy for higher wages, restoring cut penalty rates, and funding the increases of some childcare workers itself.Having won an election opposing those things, the Coalition will have to try other things, perhaps even bigger and earlier tax cuts.
Prayer would help – prayer that international commodity markets remain strong, that the Reserve Bank cuts rates on June 4 (it is practically certain to), that it cuts them again before the end of the year (financial markets are literally 100% certain that it will) and that home prices stabilise.
<h2>Perhaps a very big boost</h2>
On the face of it, none of these would be enough to force economic growth back up. If it falls even further, and continues to fall, Australia will enter a recession within this term of government, an outcome to which the academic economists polled by The Conversation in January <a href="https://theconversation.com/no-surplus-no-share-market-growth-no-lift-in-wage-growth-economic-survey-points-to-bleaker-times-post-election-110315" target="_blank">assigned a 25% probability</a>.
So far employment growth has been the economy’s brightest light, but in its quarterly update released a week before the election, the Reserve Bank pointed out that employment growth can lag economic growth by <a href="https://www.rba.gov.au/publications/smp/2019/may/pdf/domestic-economic-conditions.pdf" target="_blank">up to nine months</a>, meaning it might be about to turn down, although it added that it was not unusual for “trends in GDP growth and the labour market to diverge for sustained periods”.
If employment growth does turn down (and the bank says “near-term leading indicators of labour demand have softened”) it is likely to happen first in the construction and retail industries. The construction jobs will come again (and the government is doing its best to bolster them with promises of spending on infrastructure) but the retail jobs might never return, the nature of retailing having changed.
<h2>The economy matters more than the surplus</h2>
If needed in order to avoid a recession the government will have to be prepared to abandon its promised 2019-20 budget surplus. If the prospect of a recession does loom, it’ll have the political cover. And if it looms early in its term, it might still be able to deliver a budget surplus by the end.
Scott Morrison and his treasurer Josh Frydenberg were elected to manage the economy, and that means doing whatever is needed to avoid a recession and the long term damage to lives and living standards it would deliver.
Speaking personally, I’ve no doubt they are up to the task, just as Labor would have been. In a way it’s a pity they didn’t adopt one of Labor’s key economic promises, which was to have a new budget in August, to refresh things.
<h2>And it matters more than superannuation</h2>
And they’ve got to focus on lifting living standards over the longer-term, where conveniently, they have a big advantage over Labor.
Labor has a blindspot when it comes to superannuation. It wants to lift compulsory contributions from 9.5% of salary to 10% on July 2021, and then by another 0.5% the next year and another 0.5% the next year and so on for five consecutive years, apparently regardless of what it will do to incomes now.
It’s a good thing that unlike Labor, the Coalition will be relaxed about pushing out the timetable if the economy can’t stand it, as it has done before.
Before the election it was preparing to respond to the landmark <a href="https://theconversation.com/frydenberg-should-call-a-no-holds-barred-inquiry-into-superannuation-now-because-labor-wont-114079" target="_blank">Productivity Commisson report</a> that found that unintended multiple accounts and the defaulting of new workers into entrenched underperforming funds were costing members an extraordinary A$3.8 billion per year.
<h2>The Coalition can set up super for the future</h2>
Weeding out the chronic underperformers, clamping down on unwanted multiple accounts and insurance policies, and letting workers choose funds from a short menu of good funds and stay in them for life would give the typical worker entering the workforce an extra $533,000 in retirement.
It recommended a full-blown independent inquiry into <a href="https://theconversation.com/frydenberg-should-call-a-no-holds-barred-inquiry-into-superannuation-now-because-labor-wont-114079" target="_blank">how much superannuation we need</a>.
Labor, wedded to a series of increases, would never have done it. The Coalition can.
<a href="https://theconversation.com/profiles/peter-martin-682709" target="_blank">Peter Martin</a>, Visiting Fellow, <a href="http://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292" target="_blank">Crawford School of Public Policy, Australian National University</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/their-biggest-challenge-avoiding-a-recession-117381" target="_blank">original article</a>.
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Frydenberg and Morrison's biggest challenge? Avoiding a recession: Peter Martin

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GUEST OBSERVER
Prime Minister Scott Morrison’s comments about setting migration caps to alleviate congestion pressures in in our biggest cities are an interesting response to a highly contentious issue.
There is no doubt people in Melbourne, Sydney, and Brisbane feel the liveability of their neighbourhoods and their overall city is eroding.
Rightly or wrongly, many ascribe this fact to the pace of overseas immigration.
The Federal Coalition’s proposal to involve state, territory and local governments in managing and planning Australia’s changing population was commendable since they bore most of the responsibility for providing infrastructure for their growing populations.
Immigration is only one of many complex factors at play in the growth and development of our cities and regions, and Mr Morrison has missed an opportunity to take a strategic and nuanced approach to shaping Australia’s future.
If Australia had an integrated national urban policy – something planners have been advocating for some years – we could alleviate the pressures now being felt in Sydney and elsewhere whilst ensuring that those regions which actually want more immigrants were not left behind.
As matters stand, there is no agreed vision for Australia’s future pattern of settlement, no consistent planning parameters. As well as no nationally agreed objectives on housing, employment or infrastructure.
In such a vacuum, how will the states and territories determine their population targets?
The Commonwealth’s policies and expenditure decisions have a major influence on where jobs, new housing and population growth are located, and these needed to be considered holistically.
Cutting immigration has consequences and trade-offs and these need to be explained to the Australian public.
The Australian economy is in good shape now, with strong job creation. If skilled immigration levels are cut, who is going to fill the jobs?
Or do we simply accept this constraint to our short-term economic growth?
Secondly, if the cuts continue into the medium term, then we will not have the flow of younger immigrants to balance our ageing population, which in turn threatens our long-term economic growth.
Australia needs a nationally consistent set of solutions to ensure the continued liveability and sustainability of our cites.
These include:
1) Development of a National Settlement Strategy that provides context for better targetted national taxation, investment and migration policy; informs the growth parameters to be applied to settlement strategies; and resolves roles and responsibilities associated with growth management, land use and infrastructure planning within the context of Australian federalism.
2) Infrastructure funding aligned to the National Settlement Strategy so that future Commonwealth investment and prioritisation of “growth’’ infrastructure is targetted to those areas aligned with state and territory growth strategies.
3) Appointment of a National Chief Planner by the Commonwealth with the role of coordinating policy evaluation and national settlement strategy preparation.
4) A spatial review and evaluation of Commonwealth policies, including, taxation, investment and immigration policies, to determine the effects these have on how different cities take shape and perform.
5) COAG recognition of strategic planning, which would build on the COAG Reform Council National Criteria for City Strategic Planning (2012), with an emphasis on explicit spatial outcomes and city structures which can improve the productive capacity and living conditions of our cities through more effective integration of land use and infrastructure.
6) City Deals realigned to National Settlement Strategy (including regions)
With bipartisan support, these solutions would serve us well into the future.
BRENDAN NELSON is the National President of the Planning Institute of Australia (PIA).
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Greater Commonwealth leadership needed on cities: PIA's Brendan Nelson

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Treasurer Scott Morrison has reassured US investors – and Australian mums and dads – that Australia is not heading towards any housing market crash.
He noted house prices were high but their value was still "real".
<a href="https://sjm.ministers.treasury.gov.au/speech/025-2017/" target="_blank">In a speech in New York to investors overnight</a>, Mr Morrison pushed back at a recent warning from the International Monetary Fund about particularly high levels of household debt in Australia.
He pointed to a series of measures taken by prudential regulator APRA to constrain access to credit.
"The rise in housing values has been driven principally by genuine economic forces of supply and demand, where mortgages are subject to full recourse finance, supported by a strong, stable and resilient banking system and world's best practice credit standards.
"Low or no doc loans that crippled US housing markets are a rarity in Australia."
Morrison acknowledged household debt in Australia was high, with about 80 per cent of Australia's $2.1 trillion in household debt tied up in mortgages.
"This is a real risk, if not properly managed, and we get it", but added the figures needed context.
"While Australia's housing markets, especially in our largest cities, have experienced strong growth over the past decade this, of itself, is not evidence of an underlying weakness in housing asset values, nor that a hard landing for our housing markets is ahead," he said.
"Australian housing values, while high, are still real. 'Safe as houses' still broadly means something in Australia."
He noted the two occasions when we have seen considerable price pressures in homes in the last decade have both coincided with periods when the construction of new homes simply wasn't keeping up with population growth.
"In the last four years, supply has moved ahead of population to now build the strongest cumulative growth in stock in 25 years.
"This increase in stock is now working its way through the backlog, and there remains a strong pipeline going forward.
"In this year's Budget I announced additional measures to ensure supply keeps up with demand in the future, and am now working with our provincial Governments to improve the responsiveness and forward planning of the zoning and regulatory approvals system.
"This includes providing tax incentives for affordable housing investment, through managed investment trusts, that would be of real interest to US pension funds, providing a fifty percent withholding tax reduction from 30 per cent to 15 per cent for such investments, including development projects."
He noted as observed by Moody's in their credit report last month, when they once again maintained Australia's AAA credit rating, APRA's "proactive prudential policies bolster the resilience of the banking sector" and mitigate the risks of high household debt.
"And the proof, as always, is in the pudding."
Citing capital city house prices only rose 0.3 per cent in September to be 8.5 per cent higher through the year, he said APRA's measures, which have the full support of the government, are working to smooth the landing in our housing markets.
Morrison has visited New York and Washington for meetings at the IMF, the World Bank and of G20 Finance ministers.
 
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jonathanchancellor-7SQnKwU6yx

No low-doc helps ensure no housing market crash, says Treasurer Scott Morrison

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The Federal Government wants to encourage retirees to downsize from their big family homes.
It is part of Treasurer Scott Morrison's budget package to improve housing affordability with the draft legislation allowing Australians aged over 65 to make an exempt contribution to their superannuation from the sale proceeds.
The Government's aim is to free up the stock of larger houses for young families.
The superannuation break will apply when the elderly move into a smaller home that that "better suits their needs," or on entering the rental market, relocating to an aged-care facility or moving into their adult children’s homes.
The special voluntary superannuation contribution rules could see couples contributing up to $600,000 from the proceeds of selling their home if it has been home for the past decade.
The measure will not commence until 1 July 2018 and as the Age Pension means test will continue to apply, the measure are not expected to be taken up by too many.
The Government has released consultation draft legislation - and here are six important takeouts. 
1) What kind of homes would this apply to? 
The sale of any dwelling – other than a caravan, houseboat or mobile home – could qualify. 
2) Must the home be my main residence?
Yes, but only for some portion of your ownership period. 
3) Could I sell now and contribute after 1 July 2018? 
No. It is set to only apply where the contract of sale is entered into on or after 1 July 2018. 
4) Must my spouse have been on the title to make a contribution? 
No. The consultation draft provides that either you or your spouse must have owned the home. 
5) How much could I contribute?
The maximum downsizer contribution would be $300,000 per contributor. However, the downsizer contribution must come from the proceeds of the sale. So, if a couple sold their home for $500,000, their combined downsizer contributions would be limited to $500,000. 
6) What if I don’t have a super account? 
There is no restriction preventing you from opening a superannuation account to make a downsizer contribution.
I think there is no doubt that the reluctant downsizer demographic has created roadblocks for the orderly flow of home listings across more established areas of Sydney.
Tightly held homes means prices keep going up quicker than normal.
But their reluctance to move isn't solely due to the desire to keep the happy family memories intact.
They really want housing options such as single level patio garden homes that are few and far between in most neighbourhoods.
Additionally they are not that keen on paying stamp duty on any downsized property purchase.
Treasurer Scott Morrison needs to have Premier Gladys Berejiklian introduce a reduced or postponed stamp duty initiative to really make any progress on downsizers.
This article first appeared in the Daily Telegraph.
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Government to free up stock of larger houses for young families

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Treasurer Scott Morrison said this week's central bank’s possible hint about rate increases doesn’t indicate the bank is heading there anytime soon.
Morrison was responding to Ross Greenwood’s questions on his show on Money Show on 2GB.
The Reserve Bank of Australia estimated the neutral nominal cash rate would be around 200 basis points above its current level in comments contained in minutes of the <a href="https://www.urban.com.au/news/73239-rba-board-signals-cash-rate-rise-to-3-5pc" target="_blank">RBA’s July 4 policy meeting</a>.
The RBA’s estimate suggests the cash rate target will need to rise from 1.50 per cent currently to 3.5 per cent over an unspecified time, but Treasurer Morrison was keen not to alarm mums and dads.
Asked about the implications for households that have significant debt at the moment and also potentially for the future of the Australian economy, while also considering the budget’s deficits and surpluses and therefore the government’s debt, Morrison said he didn’t think there “are any real implications to that in the short term, or in the medium term or even beyond that”.
He said these sorts of things are “topics for economists’ picnic most of the time”, they are important no doubt, but mainly relate more to analysts who take a keen interest in key technical issues rather than the mums and dads or small businesses.
Morrison said he wouldn’t jump to any conclusions yet about the implications.
"I wouldn’t be leaping into any sort of early conclusions about having any indirect implications as we speak. These are important analyses to be undertaken but they mean more for the analysts taking a keen technical interest in these issues than they do for mums and dads or small businesses," he said.
He said the Reserve Bank had showed tremendous patience and discipline, referring to central banks cutting rates across the world, while the RBA didn’t take them down as far as the rest of the world. He said that while there was some movement with the Fed and in Europe, they are still “well below where we are today”.
Referring to RBA's minutes, Morrison said, "What that analysis that became public in the minutes in any way indicates that the bank is heading there anytime soon. Obviously, that’s a position for them. They’re an independent bank. But they will continue to have regard to the employment market, where inflation is and all of these issues.”
Morrison said the RBA had taken astute judgments in this regard, and commended both former RBA Governor Glenn Stevens and current chief Philip Lowe.
On the question of APRA raising capital requirements for banks to 10.5 percent, he said it was part of the move to build an unquestionably strong financial sytem.
The Treasurer struck a positive note on banks’ resilience and the regulatory framework, saying “we have arguably one of the strongest, most stable banking and financial systems in the world” and said the new bank levy as announced in the budget was still modest.
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