National Press Club address Q&A, Canberra

Subjects: Homes for Australia, CGT, negative gearing, housing supply, rents, NIMBY Tom Connell: Thank you, Minister, it sounds as though you’ve sort of had a journey on housing and taken a very holistic view of it. So in going about looking at all the different factors and deciding that CGT and negative gearing have had that negative impact on people getting into the market, did you come to that firm view and then go to the Prime Minister and say, ‘I think we need to do this’?

Clare O’Neil: Tom, I probably won’t include you – if you don’t mind – in the private discussions we have internally. What I can say is that there is the deepest of commitment and genuine conviction coming from the Prime Minister, from Jim Chalmers and myself to address this issue. I got involved in politics because I care about a fair and equal Australia.

And if you care about that in our country today there is no more important place to be in the debate about housing. We cannot allow this situation to continue to get worse, and that’s why – as you say – we’re tackling this problem from every angle. Now a good government that cares about the Australian people is not going to leave a very important piece of the puzzle on the table here.

It is absolutely clear that the way that these tax concessions have operated is hurting the housing opportunities of ordinary people and they must change. You mentioned voters coming up to you, some of them I was speaking to on the weekend said they were looking at rent‑vesting and they won’t do that anymore with these changes. What would be your message to people going, ‘I wanted to rent‑vest, live somewhere where I couldn’t afford to buy and I can’t do that anymore’?

I hope you told them, Tom, that they can continue to access these tax concessions. To that young person I’d say, we’ll back you if you want to take that approach, but you need to do it on a new home, and that helps us with the supply challenge facing the country. But the person you’re referring to there is the person we had in mind when we constructed this policy.

That is a person who should not have to think over a 15‑year period about their plan to get something that was quite achievable for Australians 40 years ago, and that is a home of their own. So the reason that we’re reshaping these tax concessions is to level the playing field for first‑home buyers like the person that you’ve spoken to, and they alone will get 75,000 rental households into first‑home ownership.

I didn’t give them financial advice, but I said keep an eye on things – Leave that to me for the National Press Club podium, yeah. – in parliament. You also mentioned the couple having pizza on the floor of their new property. How do you think they might feel – they’ll have 5 per cent equity if houses drop sort of 10 per cent, and they’re sitting on negative equity.

Would those people that have taken up that scheme, if they do see a fall in house prices – which has been predicted, and particularly in Melbourne and Sydney – will they be getting a bit nervous? Tom, the Budget papers, I’m sure you’re aware, modelled the price impacts of the tax changes that the government is putting forward, and the affordability impact is modest but meaningful, it’s about 2 per cent slower growth than we would otherwise see.

Right. But in the alternative situation, plenty of economists suggesting it could go further south quicker. Is that something you’re cognisant of, or is that just it will be what it will be?

Well, I’m obviously the Housing Minister, so I’m deeply cognisant of the housing situation of every Australian. I just take you back to isolating the tax changes, which is what I think you’re asking me about. Treasury has modelled this, the affordability improvement sum modest, about a 2 per cent slower growth rate than we would normally see property rise.

Go to some questions on the floor. Nick Newling from the SMH and Journalist: Minister, thank you for your address. You spoke about the government’s housing targets at 1.2 million, and you described it as being aspirational.

And notwithstanding those successes that you said it had had in policy in the states, do you think the current shortfall in that housing target is surmountable by the end of the period? And should the government fail to meet it what repercussions do you think Labor and yourself as the Minister should face? We’re really committed to trying to reach the 1.2 million.

You said it was aspirational, and that was exactly how we decided to set the target. We could, of course, have done the politically conservative thing and just added up how many homes we thought we’d build in 5 years and add a few thousand to that. We didn’t do that.

That’s because the Prime Minister, state and territory ministers, local government and industry agree with our government that we needed step change here. We don’t want to see just incremental improvements to housing, we really want to drive a different system for our country. Now I’m very respectful of your question, but I’d just come back again to the points I made in my speech.

This target has already created massive policy change for the country. We’re starting to see the benefits of that, just on last year a 26 per cent improvement on commencements, that’s really good. But trust me, I’m not stopping there.

I hope you feel my passion for this in the speech that I’ve given you now. Every budget, every MYEFO, every election, I am there with a fresh set of ideas to try to help us address this problem for the country, and I’ll continue that work. Journalist: And on the repercussions side of it, do you hold personal standards for that?

Are there electoral – sorry, voting expectations in the elections that you think might happen if those targets aren’t met? Look, I’m really committed to these targets, and I’m doing everything we can, and the government is doing everything that we can to meet them. I might just point out, and I’m not saying this to point the finger, but I think you’ll understand the states and local government have a really, really important role to play here.

Now that has been used as an excuse by other political parties and other prime ministers to say we’re not going to engage in housing. We’ve actually taken the opposite view, and I think we deserve a bit of credit for that. The Commonwealth can’t control this problem completely.

We can’t solve it on our own, but it’s not going to get solved without our encouragement and leadership, and that’s the attitude we take to the targets. Isabella Tolhurst from the ABC. Journalist: Hi Minister, thank you for your address.

You’ve argued that negative gearing should better support housing supply in changing it to only apply to new builds. But if new builds are often seen as less attractive to investors because of higher costs and lower yields, realistically how much does the government expect behaviour to change? Time will tell.

We will see. We’ve seen some really encouraging signs since the Budget announcement. Harry Triguboff – who’s a major developer, as you know, in New South Wales – has talked about the fact that he sees that investors will see new housing as now at the top of their list of things to invest in in Australia.

There’s been some really good reports out of home builders for the impact of what they’ve seen in the last couple of weeks. What I would say is that this is the most pro‑supply way to make this change. We want people to invest in housing and I just – I’m sure you’ve seen all the charts in the Budget papers – one of the real shortfalls of the previous way that the CGT and negative gearing regimes interacted was that it actually punished people for investing in apartments.

That will change. With the new CGT options available for investors, we should see more investment in the kind of housing we need most, which is infill housing in our middle ring suburbs. So as well as that, just to remind you, that this was a package as a whole in the Budget.

We are a firmly pro‑supply government because we see that the answer ultimately to affordability in our country is we’ve got to build more housing, build more housing, build it more quickly. That’s why we invested an additional $2 billion in last mile infrastructure. If you talk to developers around the country, they will tell you this is one of the biggest barriers in getting housing developments off the ground right now, and it brings our investment up to 6.3 billion.

I hope you won’t mind me mentioning to you that is 50 times what the Coalition spent in 9 years in office. Quite often for, a say lower‑middle‑income family with kids, if they want to get that old quarter‑acre block dream, they’d go out to a new build, to a greenfield site, that’s the more affordable aspect. Is that going to be harder for them now because investors will all be pushed towards new builds?

Well, that family that you’re talking about right there, Tom, that’s exactly who this policy is designed for. What we’re trying to do is put them in a premier position at auction against investors who are backed by tax concessions. So they’re going to have a range of options in the market, and I hope these new builds will help them get access to more housing.

So is there any work done though on the fact that investors will presumably go more after these new builds, if an owner‑occupier wants to go for a new build, it will actually get a little bit harder? Well, what I can tell you is the net effect of this is a slight slowing of house price growth and tens of thousands of more people who go from renting into home ownership.

Jack Quail from The Australian Journalist: Thanks very much, Tom, and thank you, minister, for your address and taking our questions today. The tax changes in the Budget have been sold by you today as supporting young Australians into home ownership, and that certainly may be so for negative gearing and the changes to the capital gains discount for property. But you’re also extending the CGT changes across every asset class and you’re also making some changes to some trusts.

I guess doesn’t this show, and shouldn’t the messaging have been around these changes that, you know, these changes are going about raising revenue when you have such big spending pressures coming down the line for the budget, and rather than, I guess, just focusing on the housing change? Yeah. Thanks, Jack.

I really appreciate that, and I’m probably focusing a bit more on the housing aspects obviously given my role as Housing Minister, but you make a good point. There was a big package of reforms in the Budget, not just about helping first‑home owners stand on a level playing field to investors, not just about building more homes, but about designing a better tax system for our country.

You asked about the capital gains tax exemptions and applying those differently to other assets across the economy. We’re trying to make the tax system fairer. If we just stand back from the minutiae of the debate, we’ve got a tax system today that punishes Australian workers too greatly.

I want them to pay less tax in our country, and that’s why our government’s package delivers a tax cut to every single Australian worker, our fifth since we came to office. So that’s the overall net effect of the package, is slightly relieving income tax for workers who get paid normally, as most people watching right now would do, it makes some changes to the way that effectively wealth is taxed, and that’s a good thing for our country.

Journalist: I guess though the tax cuts you’re affording workers aren’t offsetting completely the changes, the other tax changes that you announced. I mean is – I guess can you respond to that, and also is there I guess a missing piece here about, you know, the revenue that the budget needs when we have such great spending pressures coming down on us? Yeah, sure.

So the overall tax package that’s before the government right now is revenue neutral, so basically, roughly over the forward estimates. So what that means is the additional revenue that we’re raising we’re giving back to Australian workers through tax cuts. You mentioned people paying less tax.

Anyone buying a house pays a lot of tax when it comes to stamp duty. I note the Chief Minister in the room, he’s sort of responsible partially. You could be popular if you take charge and get the states to abolish it.

Is that something you’re looking to a national approach, it’s described as inefficient. What are your thoughts on that? Yeah, look, I’m really respectful of that question, Tom, but I need to leave that one to state treasurers.

This is completely within the purview of our state and territory governments, and I’ll leave it to treasurers to respond to you about that. It’s crucial within housing though. Is it something, you know, you’ve gone one big bold reform?

Look, I would love to live in a world where the Commonwealth gets to control the states completely, Tom. That is not the world that we live in, on this and many other matters. So this is for state treasurers, they don’t need my advice about how they run their books, so I’ll leave it to them.

Lea Jurkovic from the AFR. Journalist: Thanks for your speech, Minister. You asked us to picture first‑home buyers at an auction, but Westpac research estimated that housing market turnover is set to decline 20 per cent over the next 18 months due to high interest rates and the changes to tax in the Budget.

And RBA forecasts are also markedly less optimistic than Treasury’s forecasts for dwelling investment over the next few years. The forecasts from the RBA are outright negative in 2027. So does this mean that the budget delivered in the current environment means things will get a little bit harder for first home buyers in the near term before we might see some of the supply response that you speak about?

That’s not what I anticipate, and I certainly don’t think that’s what we’ve seen in the first couple of weeks where we’re just starting to get those early signs of what this will mean for the housing market. I can’t promise that what’s happened the last 2 weekends will reflect the future. But it’s a long time since I picked up a newspaper on a Sunday and saw headlines about first home buyers winning at auction, a single mum winning at auction, a first‑home buyer saying, ‘We’d given up on buying in that suburb and suddenly it’s possible for us’.

So I think those are some good early indications about what this might mean. And I just bring you back to the Treasury modelling. This reform will help us get 75,000 renting households into first‑home ownership, and that’s a really good thing for them and for our country.

Cam Reddin from Journalist: Minister, thank you very much. On the subject of wishing you could control state premiers, the New South Wales Premier, Chris Minns, today is requesting federal funding to help with the resettlement of the women and children who’ve arrived home from Syria. That could include housing costs, other things like counterterrorism and other things.

Is that funding the federal government is open to providing, and do you have any idea of how much might be required? Yeah. Cam, I really appreciate that question.

I just don’t have that information. That’s something the Home Affairs Minister would be managing, and you need to direct that to him. Journalist: But is it something the government would consider?

Again, I’ll just leave that to the Home Affairs Minister, it’s quite a long way from my housing portfolio. Journalist: Okay, thank you. Ellen Ransley from The Courier Mail Journalist: Thanks, Minister.

The Budget contained modelling suggesting that rents would increase by about $2 a week in response to the tax changes. The modelling shows that it might actually raise rents by even more than that? And what were the assumptions in that modelling in terms of inflation and how many new houses would need to be built to keep rents increased at just $2 a week?

Thanks, Ellen. Really good question, and this is all about renters and making sure they get better opportunities to get into a home of their own. So you’re right, Treasury did model the impact on rents.

The impact on rents is – according to the Treasury model – very minor. Why is that? That is one of the main reasons that the government chose to grandfather existing negative gearing arrangements.

Everyone who is offering a rental property right now will face no changes to the way that their negative gearing concessions work, and that’s going to be an important thing for renters. And I know there’s a bit of a debate about this, and you’ve had some Liberals out with, you know, very shoddy modelling, saying that that Treasury estimate is wrong. Could I just encourage everyone in this room, everyone watching at home, don’t listen to the politicians on this one, go to the rental advocates, go to ACOSS, go to Better Renting, go to National Shelter.

These are organisations that have decades of experience advocating for the renters of our country and they are fiercely supportive of what our government is doing. Are rental prices though a canary in the coal mine? Will you keep a close eye if they’re going up more than expected perhaps, you know, the impact before of negative gearing was more than you realised?

Tom, I’ll keep an eye on all of this very closely, it’s my obsession, this work I do in housing, of course I will. But if you just think about the economics, we’ve got grandfathered arrangements for everyone who’s existing in a rental property at the moment, and then a big push on new home building. Ultimately, the ultimate net effect of the Budget will be to put downward pressure on rental prices, and that’s because we’re increasing supply.

Over that medium term though, if it’s going up more than expected, what will that be down to, do you think? Look, I’m going to go off what the Treasury modelling says, ‘cause that’s the information that we have right now. And again, I come back to these advocates, Tom, you know, people will try to make arguments in this debate about, you know, what they think’s going to happen for very political reasons – go back to the people who’ve been supporting and pushing for renters’ rights for decades and listen to what they have to say.

It’s fair to say though that modelling isn’t always bang on though in budgets? Well, you have your own commentary on Treasury modelling, Tom, but I just take you back to the basic economics. We’re grandfathering existing arrangements and building a lot more homes.

Jacob Shteyman from AAP. Journalist: Thanks for your address, minister. You spoke very evocatively about the big thickets of red tape.

Builders have to drive a bulldozer to get through in order to build a home nowadays. All that’s been made of the size of the National Construction Code, how that’s blown out and how new elements requiring energy efficiency and disability access requirements are adding additional burdens for builders. You’ve frozen the construction code, but that isn’t really removing the red tape.

We’ve got an inquiry going into that as well. Why do we need another inquiry from the Productivity Commission? Don’t we know now that red tape is a problem and get to work cutting it?

Sure. Oh, there’s a fair bit in what you’ve asked me there. Let me just make a few comments.

The red tape and regulation thicket is very real. I’m a Labor politician, it’s not my natural inclination to think that there’s too much regulation around what happens in private enterprise. I have looked at what builders confront, it is wild what they have to do just to get a house built in this country, and they say to me, ‘We feel like the governments of our nation never want us to build another house again’, when in fact the opposite is true.

So it’s real, and the government’s very committed to it. We control a few big pieces of that administrative nightmare that we’ve created for them. One of them is the EPBC, and you probably saw me and Minister Watt stand up earlier this week with spectacular results from the fast‑track approach we’ve set up within the Environment Department to now assess 35,000 homes in a very short period of time, and that work will continue.

We have, not control, but a lot of say and leadership over the National Construction Code, and that’s the bit that I’m spending a lot of time on at the moment. I noticed the Liberals have said they’re going to reduce that Code down to 200 pages. I’ve talked to builders about that, they laugh their heads off.

That is absolutely ridiculous. We need rules with how we build homes in this country, we just think they’ve gotten a bit out of control. We’ve got to have safety rules.

We don’t want to set up a bunch of people to buy into homes that then fall apart around their ears, and that would be the effect of – effectively saying the Commonwealth’s not going to have any say in all of this. So we need to get a balanced approach with the Construction Code. We’re working really closely with the sector at the moment to understand how we can bring the code back into a manageable regulatory impact.

One of the main issues with the construction code though is it’s so difficult to navigate and use. It’s a very practical problem in that we haven’t used technology that’s available to us to enable builders to be on the fifth floor of a new apartment building and easily access that code. So we made some changes in the Budget to address that problem, but that’s something that I’m quite focused on.

Now you asked about the Productivity Commission Review. Very respectful of what you’re saying there. This review’s going to, in my view, have a really powerful impact.

Why is that the case? You probably hear a lot from business about red tape and regulation and the frustrations they have. It’s quite hard to then get to the point of, well, what are you exactly talking about and where is the exact cost.

And that’s the work that we need the Productivity Commission to do with the state ministers, we need some guidance and a set of recommendations to coalesce around about where we go next. So we’ve picked off the kind of lowest hanging fruit in red tape and regulation. This will help us chart that next reform course.

Journalist: But will you consider rolling back some of the more recent additions to the construction code, like disability requirements and energy efficiency? That’s not something that most of the builders that we work with are actually advocating for. They want to see improved standards for things like energy efficiency in Australia.

I think it’s more about going forward, how do we manage future changes to the construction code, and how do we make sure that we build a process here where the incentive to put something in also creates an incentive to pull something out. One of the reasons that the construction code’s become so unwieldy is because, you know, the way that we’ve set up the governance process means it’s very easy to add things in, and no one’s really in charge of having a simplified code that builders can actually use.

So energy efficiency’s an interesting one. A lot of people want a house like that, but it’s the cost and time that it can take that people will say it’s slowing down building. Have you looked at whether maybe delays, pulling some things out until we’ve caught up on housing could be an ideal – less ideal but better than not having enough houses?

It’s just not where the discussion’s been, Tom, honestly, with the builders of Australia. They’re not saying to us, ‘Wind this back, pull out all the good standards that we have’. Builders of this country do not benefit if we have a housing market where buyers can’t trust the quality of the product that they’re purchasing in.

That doesn’t help anyone. They’re not really advocating for us to reduce standards; they’re saying, ‘Hold on a second, this document’s become really unwieldy, we need you to refine it, and we need you to make it easily accessible’, and so that’s the work that we’re doing with states at the moment. If I could just say, I mean there’s a bit of interest in this room in the construction code, I’m in my happy place right now.

So one of the main reasons this document’s become so complicated is because states and territories have taken their opportunity to create their own variations. So in some respects this is not really a National Construction Code anymore, it’s a backbone for construction which each state and territory adds their sort of different aspects on to. That is creating a lot of complexity – Like duplication and – Minister O’Neil: – yeah, duplication, yep, different rules, you know, of course there’s reasons why we might build housing differently in Cairns than down in Launceston, but that’s not – with the state variations, you don’t see those good justifications.

So in the Budget, $2 billion for infrastructure spending for states, territories and for their utility providers, that money comes with strings attached, and one of those strings is that we want the states to sign up to a more national version of the construction code. And builders really don’t want a smaller book to go through? Look, I’m sure you could go and interview a whole bunch of builders now and some of them would say that to you.

The peak bodies and the advocacy groups that we work with most, that’s not generally what they’ve asked for. They don’t want to see housing standards in our country go backwards, they want to see a pause, which we’ve given them. They want to see us think about the governance process for the Construction Code.

And they want an easier, simpler way to access it. Okay. Apologies, I’ve been keeping Misha Schubert waiting.

Misha Schubert: Misha Schubert wearing my hat as a director of the Press Club. Minister, just to further build on those questions around bulldozing the thicket of red tape, and I know you’ve declined the gracious invitation to direct premiers as to what you think they should do, but I wonder if you’ll take it up in relation to mayors. And my question is really, you’ve identified those pieces of reform in the Productivity Commission work and in looking at the Code.

To what degree are these impediments also being in the gift of local councils and local governments and what sorts of things are you contemplating wanting to see happen there to smooth and speed these processes? That’s such a great question. I’m building a fiefdom here before our very eyes.

I love it. So with local government, I’m a former mayor, I love local government. I could not have more respect for this fantastic way that we have this level of government that’s so close to the people that deals with the practical issues that confront them every day.

And I think some time in this conversation we get a little bit – lumping all local governments in together, and the truth is that some of them are amazing, some of them are doing so much pro‑housing reform. One of the most common visitors to my office is regional councils, who are desperate to help us with the national housing challenge but looking for funding, like the $2 billion that was in the Budget to help them get it off the ground.

So I think most local governments are in the right place, but not all of them, and the people who I have the most objection to are the local councils of those inner‑city and middle‑ring suburbs in our capital cities who are not absorbing nearly as much housing as they should be. You know, we’ve got a growing population, we’ve all got a responsibility to share the issues that come with that.

And we shouldn’t have suburbs that are so beautifully located where we’ve had decades of opportunity to build up brilliant amenities, great local schools, beautiful parks, and then to say, ‘We’re not going to accept anyone else’, when we’ve got the outer suburbs which don’t have those decades of investment in amenities absorbing so many new people. So I do think we’ve got to be really fair about this.

If I just come back to the Productivity Commission inquiry, this is exactly the kind of thing that the Productivity Commission is going to help us with. It’s really about this thicket of red tape that I’ve talked to you about, helping us prioritise where we put our efforts, and some of our state governments around the country have done some pretty bold things.

We’ve seen planning reform in this country in the last 5 years that would have been unthinkable in this country a decade ago. I just point you to Western Australia, where pretty medium‑sized housing projects are now, as a matter of routine, called in to the state government, who have got that big picture, whole‑of‑state perspective, and I think we’ll see more of that to come.

Ron Mizen from the AFR. Journalist: Thank you, Minister, and it’s a bit of an extension of that question about a 9 minute – you talked about the need for more housing in middle‑ring and the inner suburbs. About 9 minutes from where we are today there’s a proposal for a horse agistment.

A horse agistment – it’s a very Canberra thing to have a horse agistment right next to parliament – to turn a horse agistment into a sort of 13–14 thousand apartment development, and that’s facing a massive backlash from the residents there. And in Sydney, in Balmoral, you’ve got the proposed sale of HMAS Penguin – the diving school there, and the local council and the local residents say that that’s a national security risk, and they’re pushing back against that.

What is your message to the NIMBYs of the world, the people out there who are saying, ‘Oh, it’s all very well and good that we need more housing, but not in my backyard’? Can we just give Australians a bit of credit first. I’ve been involved in town planning for a really long time.

I was a mayor 20 years ago, and you know, we were having arguments about where housing would go. They have very little resemblance for the public discussion that we’re having about density in housing. We need to build more densities in our country, full stop.

There is no country in the world anything like Australia, that has affordable housing and the density issues that we confront. It is a part of the solution here, and it’s a very important part of the solution. What I increasingly see when I talk to most Australians about this is that for the first time people are making the connection between the housing development down the street from them and the capacity of their children to get into a home of their own, and that’s the connection that needs to be made.

And so I wouldn’t certainly be on my feet here being sharp with Australians about this. I just think we need to keep explaining to them, density can be a fantastic thing for our cities. You see huge improvements in amenity when you see good density.

And if I went to any city in Europe – I live in the beautiful suburb of Oakleigh in Melbourne – if I went to any city in Europe which was as far away from the city as I am, I’d step out of the train station and it would be medium density housing, flourishing local economy and people getting to share in the fantastic life that we get to live in my suburb. When I get off the train now it’s mainly one storey, as far as the eye can see.

But we do need to fix that if we’re going to get on top of this for the country. Nick Newling from the SMH and Journalist: Back on to productivity, with the kit‑building announcement from today, can you tell us what modelling has been done on how that’s going to impact the speed at which houses are built? And how many more homes will be able to be delivered in the short‑term so that we can return to that 1995 level where houses were being built twice as quickly as they are now?

So the kit‑of‑parts approach, I’ll just acknowledge Matt Aitchison who’s in the audience here, is an invention of the Cooperative Research Centre on housing. It is a $40 million investment that we’re announcing today to roll this out effectively to states and territories to integrate into their social‑housing programs. One of the fantastic things about the kit of parts – which is effectively like building pieces of the building off site and then going on site and attaching it together – it’s fast, it’s efficient, we get much more housing for the same dollar.

When you see in social housing a lot of wear and tear on homes, you can actually rebuild the house very quickly and efficiently. So it’s a fantastic thing to be doing. That $40 million couldn’t be better spent.

It’s just the beginning though for me on housing innovation. I think I mentioned in my address 80 per cent of homes built in Sweden have some aspect of modern methods of construction involved, in Australia it’s 5 per cent. We do need to change that.

Now you asked about modelling. It’s not been modelled, the $40 million investment, but what I can tell you is if we keep leaning on this, we’re going to build more homes, and we’re going to do it more quickly. Journalist: There was a crack at NIMBYs before.

Are we pre‑fab snobs in Australia as well? Look, what I believe about this is we had a few experiments with pre‑fab and other modern methods of construction in the 60s and 70s and 80s where we built lots of public housing that wasn’t particularly well done out of these materials. Can I just say to everyone in the country, that is not what this is about.

If you go to Sweden you will see beautiful homes, perfect homes that are absolutely at Australian quality or higher, which are built using these methods of construction. So we’ve got a funding issue that the Commonwealth government is helping to resolve, but I think we’ve got some attitudes that we need to kind of address as well. And I can say to Australians as Housing Minister, I’d be very happy to live in a home that was built with this methodology.

Jack Quail from The Australian Journalist: Thanks again, Tom, and thank you, minister. I was before this address looking at housing approvals data, looking back over the last decade or so, and you talk a lot about the Coalition in your address. I mean in – under their government housing approvals peaked around 240,000, dwindled quite a bit, got down to 176,000, came back up again to 223,000 in their final year of office in 2021.

And then in 2022 it got right down to 164,000, and it’s come up again since then. We’re, what, 196,000 in the calendar 2025 year. I guess what do you attribute that for post‑Coalition, since you’ve taken government to, I mean given we have had such a great intervention in the housing market under this government?

Yep. So, Jack, I’d be very careful to attribute anything positive that happened in the housing market to a Coalition government that didn’t have a Housing Minister to be keeping a watch of it. Let’s be real about this.

This was not a subterfuge activity. When Tony Abbott was elected in 2013 he literally said, ‘We’re not going to do housing anymore’, and that’s why they didn’t have a Housing Minister. So I just clarify that point with you first.

If you have a look at the research, it’s actually really fascinating to look at what happened in those few years where our country built an unusual amount of homes. It had to do with domestic conditions in China, partly, but a lot of this is to do with interest rates. The most powerful driver really of what goes on in our market from year to year is what interest rates are doing.

And I very much accept the call that we need to do more to build more homes in Australia; that’s the central, you know, reason why I’ve – one of the central parts of our plan. But given where interest rates are in Australia we’re actually building quite a few homes, if you look back at periods where we’ve had a kind of similar interest rate to today, you know, the very best thing that could happen is for the war in Iran to finish as quickly as possible and for interest rates to come off a bit, and that will help build confidence in the market.

Journalist: I guess it raises the question though, given the interest rates are high at the moment, it limits greatly, I guess, how much government can do at these times? Look, you’re making the point that some of what goes on in housing is beyond the control of different levels of government in our country. Previous political leaders have used that as an excuse to not engage with this problem.

My strong view is that if we’ve got an issue facing this country that’s hurting millions of people, that’s changing what it means to be aspirational in our country, that’s leaving a generation behind – no government should stand back and do nothing. So, yes, we can’t fix everything immediately, but I hope you see we are having a goddamn crack at this thing. Like the plan, the update to the plan that we’re releasing today is without question building on what was already the most ambitious Australian Government agenda on housing in 70 years.

And we’re seeing good progress, but we’ve still got a long way to go. Cam Reddin from Journalist: Minister, thank you very much. You made a comment a moment ago about good density and seeing the one‑storey houses every time you get off the train.

Just on a quick look at the numbers, so about 40 per cent of new builds are high density at the moment. So a lot of apartments, and for a 2‑bed unit, the median price in Sydney, $1.2 million, nearly a million in Brisbane, 650 in Perth, 550 in Melbourne. So if people do get that dream of home ownership, the morning after is the reality of that dream owning a million‑dollar shoebox, a lifetime of debt and sleepless nights every time there’s a Reserve Bank Board meeting?

Thank you, Cam. Really appreciate that. So I think what you’re pointing to there is that we’ve got some real feasibility challenges with building the homes that we need in Australia.

What you’re talking about is really the impact of high construction costs and construction costs that we saw growing at 17 per cent a year in the immediate post‑COVID period. Our government is trying to help bring the cost of housing down, and that will help us build more of it, and the things that are in this plan are all about doing that. So the $6.3 billion that we’re investing in last mile infrastructure, that’s investment that would otherwise be built into the purchase cost of a home.

The things we’re talking about with the National Construction Code with the red tape and regulation, in housing, as in everything, time is money, and we are delaying builders from doing what we need them to do and adding to the cost of every project. So you’re kind of looking at things from the consumer point of view, which I absolutely appreciate. From the public‑policy point of view, you are right in the guts of what’s gone wrong here, and it’s not one answer, it’s many, and that’s why our agenda is so fulsome.

Journalist: Is it realistic to still dream of a backyard and a quarter‑acre block? Look, it is, it is. But we need to build more housing of every kind, because Australians have different preferences, and things are changing.

You know, if you want a big quarter‑acre block, you are probably going to have to move a bit further out from the city than you did 10 years ago or 10 years before that. The thing we need to do is have housing options for everyone, and there’s lots of people your age, Cam, who actually quite like living in apartments. You can live a great life in an apartment in this country, so we just need to make sure that there’s options available for everyone who needs one.

Journalist: Thanks very much. In Cam’s defence, he does love his apartment. Oh, so Cam lives in an apartment.

I see. Maybe he’s dreaming of the quarter‑acre block. Ellen Ransley from The Courier Mail Minister O’Neil: There’s a lot of lawns to mow, Cam.

Journalist: Minister, you briefly touched on it, but the war in Iran is having an impact on the housing industry here. We know that there’s a shortage of PVC conduit and plumbing pipe. To what extent do you anticipate that having an impact on that ambitious target of 1.2 million homes?

If the war doesn’t end soon, as you hope it does, how much further behind do you risk falling? We’ve had Treasury look at this in some detail, so I can speak to you about it quite specifically. This is quite frustrating, because actually, we’ve really turned a corner on housing construction.

I mentioned that 26 per cent increase on starts, that’s the best number we can get, because starts is actually a house coming out of the ground, so 26 per cent in a year is a fantastic result. And then not long after those numbers came out we had the war in Iran begin. This has created challenges for our builders.

Construction’s one of the biggest users of diesel in our whole economy, and you mentioned PVC pipes. There’s a bunch of inputs in a new house that use, you know, use fuel. So, we’ve worked very intensively with our builders around the country.

I think it’s fair to say there was a lot of agitation in the early weeks of the war, but our builders are problem solvers, they’re innovators, and many of them have found alternative supply chains or found their way around some problems. However, it is adding cost, and especially that diesel aspect that we can’t get away from. Treasury has looked at this, they’ve said it will have an impact somewhere between 10,000 and 30,000 homes of the 1.2 million.

The big picture message, though, the best thing for our country is for our government to secure fuel for Australia, and that’s exactly what’s happened. You’ve seen the PM all over the world, talking to world leaders, getting us at the front of the queue, and he has got us to the front of the queue. It’s a really big and important thing to acknowledge, and we need to keep working with our builders as we go, but let me be really clear: for housing, the end of that war could not come soon enough.

You’ve had a relentless focus on people getting access to homes, and you love a target. What target of home ownership could you go for, or would you like to go for in Australia? Per cent of the population, if you like.

Yeah, so we haven’t set a home‑ownership target in the, in the document that I’m releasing. But we do have some really clear numbers that talk to how many homes – how many young people we want in homes. 250,000 already through the 5 per cent deposit program, what a massive thing for our country. A quarter of a million Australians, just since we came to government, who have gotten into their own home because of a government policy.

And then you know the 75,000 number that will be the result of the negative gearing and capital gains tax changes. But would you set one on home ownership? Because obviously, there’s the other factor of migration, so building houses is great but – Do we not have enough housing targets for your liking, Tom?

Another one would be good. Because that’s not usually the feedback I get. So, we’ve got a lot of targets out there. 1.2 million homes, 55,000 social and affordable homes, we’ve got our 250,000 first‑home buyers – 75,000 through the tax changes, and I think I might leave it there.

Alright, fair enough. Well, I’ll leave it there as well. Minister, I appreciate your time.

You get, of course, a guest speaker membership. Ladies and gentlemen, please thank Minister Clare O’Neil. Wonderful.

Thank you for having me. Thank you.