BUDGET REACTION – WHILE SOME Federal Budget initiatives to increase housing supply have been welcomed by Sustainable Population Australia (SPA), Labor’s move to expand eligibility for the Help To Buy scheme is not one of them. SPA claims the move will “exacerbate demand”.

SPA research points to the housing crisis not being solved until demand is reduced and SPA communications manager Michael Bayliss said the Federal Budget 2025 was not heading in the desired direction.

SPA’s position is that Australia's housing crisis is “entirely due to rapidly rising demand, with an increase of 1.6 million people over the last three years”. They say the solution is to cut Net Overseas Migration to 70,000 per year “so that construction of new dwellings and other infrastructure can keep pace”. 

Mr Bayliss said the housing crisis had been driven, for most part, by record levels of population growth, including 1.6 million over the three years to September 30, 2024 and 8.7 million – or 45 percent – since 2000.

“Since the rising costs of living and lack of available housing has pushed Australia’s total fertility rate down to 1.5 children per woman, the only way to rapidly reduce demand is to cut net overseas migration (NOM),” Mr Bayliss said.

“The latest figures from the Australian Bureau of Statistics (ABS 3101.0), reveal that Australia grew by 484,000 people in the year to 30 September 2024, of which 379,800 or 78.5 percent, resulted from NOM.”

SPA national president Peter Strachan said, “As SPA noted last week, with an average occupancy of 2.5 people per household, an extra 193,600 dwellings are required to accommodate this population growth, before meeting existing demand from homeless people forced into tent-cities.

“Yet only 158,690 new homes were commenced in Australia last year, resulting in a shortfall of 35,000 dwellings, just to deal with latent demand.

“At the very least, NOM must be cut to reduce population growth to a level such that construction of new dwellings and other infrastructure can keep pace. 

“Ultimately, however, we need to reduce NOM to its long-term average of around 70,000 per annum, in line with post-war historical levels up until 2004.”

Mr Strachan said some Budget initiatives to increase supply were welcome including: an extra $54 million to states and territories for more prefabricated and modular homes; a ban on foreign investors buying existing homes for two years from next month; and doubling incentive payments for construction apprentices.

“On the other hand, expanding eligibility for its Help to Buy scheme for first home buyers will pour petrol onto the fire of over-demand,” Mr Strachan said.

Mr Bayliss said, “If Australia can stabilise its population below 30 million by managing immigration, scarce resources of capital and labour can then be reallocated away from housing construction towards more productive areas of the economy.”

www.population.org.au

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BUDGET REVIEW – A COALITION policy to direct funds from super for house deposits – reaffirmed in Opposition Leader Peter Dutton’s Budget-in-Reply speech – would raise house prices by up to 10% according to the Super Members Council.

The Super Members Council (SMC) has urged the Coalition to dump its ‘super for a house policy’. The council said withdrawing super for house deposits “has been discredited by a long list of respected economists”.

SMC CEO Misha Schubert said “a vast body of expert evidence” showed was crystal clear that early withdrawals of super for house deposits would just push up house prices further and faster – pricing more Australians out of owning their own home. 

Detailed analysis of evidence from New Zealand found after it introduced a super for house scheme, house prices took off – growing at twice the rate of those in Australia up to the market peak (in 2022) – and home ownership rates fell by 7 percentage points for Kiwis in their 30s, a key first home buyer demographic.

A study by leading housing economist, University of South Australia professor Chris Leishman, commissioned by SMC, found the Coalition policy allowing first home buyers to withdraw super for house deposits could see house prices hike by up to 10.3%.

Pouring retirement savings into house deposits would supercharge an already-inflated property market – raising capital city median prices by up to $92,500 and adding $260 a fortnight to a homebuyer’s mortgage.

 “Raiding retirement savings for house deposits would just unleash a supercharged price hike in house prices, not create more new home buyers,” Ms Schubert said.

“That would mean home buyers in future would have to pay higher repayments on bigger mortgages for longer, worsening housing affordability and cost-of-living pressures on younger Australians.

“The international literature is clear, the lived experience in New Zealand is clear, and detailed and rigorous econometric models are clear – taking super out for house deposits will just further drive-up house prices, fuel higher mortgages and debt stress in a cost-of-living crisis and push the Great Australian Dream of home ownership even further out of reach for many young Australians.

“And if people retire with less super, that will also push up age pension costs – a bill that every Australian taxpayer would pay.”

She said SMC analysis showed a 30-year-old who withdrew $35,000 from their super today could retire with about $195,000 less in today’s dollars.

Australia’s leading economists say the housing supply and affordability crisis needs to be tackled with other policies – in a recent  Economic Society of Australia survey, only one out of 49 top economists supported withdrawals of super for housing.

In a comprehensive report in 2024, independent economist Saul Eslake showed policies that allow Australians to pay more for housing just result in more expensive homes rather than a higher proportion of people owning housing. 

Table 1: Estimated upper-bound price impacts from allowing first home buyers to access super for a house.

Notes: Professor Leishman found that the policy would increase house prices by between 7.4% and 10.3%.  The above estimates are based on the upper bound of 10.3%.  Median house prices for each capital city are sourced from the CoreLogic Hedonic Home Value Index for January 2025, with prices rounded to the nearest hundred dollars. Property prices include both houses and units.  Mortgage repayments are calculated using average lending rates for new owner-occupier, principal-and-interest loans as sourced from the RBA, and assume a 30-year loan term, and holding the deposit amount constant.

Source: SMC analysis; Leishman C., 2025, The housing market effects of borrowing from superannuation; CoreLogic Hedonic Home Value Index as at 31 January 2025; RBA Lenders’ Interest Rates for January 2025.

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BUDGET REVIEW – CPA AUSTRALIA has welcomed Opposition Leader Peter Dutton’s promise to make the instant asset write-off permanent – and increase the limit to $30,000 if it wins the Federal Election – but argued “this should never have become a political football”.

CPA Australia chief executive officer Chris Freeland said the Coalition’s pledge to make the instant asset write-off threshold permanent at $30,000 was the right call for small business, “but the business community should not be stuck in the middle of a political fight”.

The announcement from CPA came after the Federal Government failed to address the future of instant asset write-offs in Tuesday night’s Federal Budget.

As it stands, Mr Freeland said, the current $20,000 measure, which was passed by the Senate only this week, will expire on July 1 and revert to just $1000 for businesses with revenue up to $10 million a year. 

 “The instant asset write-off provides a vital opportunity for small businesses to invest and grow,” Mr Freeland said.

“As a temporary measure only, it has not been utilised as much as it could have. Small businesses in particular need policy certainty to make informed investment decisions, especially when they involve significant financial commitments.

“The practice of legislating this measure annually has created uncertainty and has discouraged investment at a time when many businesses are keen to take advantage of such incentives,” he said

“The instant asset write-off has been a low-hanging fruit that small businesses have been hoping to utilise – but many have resisted because of the fear that it would be taken away. Businesses cannot operate like this.

“The instant asset write-off should have been made permanent in the Federal Budget – instead the business community was left to sit and wait even longer. This shouldn’t have become a political football.” 

Mr Freeland also welcomed the Opposition’s plan to cut fuel excise in half for the 2025-26 financial year but said politicians need to move aware from short-term election sweeteners and focus on substantive long-term reforms to the tax system.

“The promise to reduce the fuel excise will be welcome news for many sole traders and businesses with high transport expenses,” he said. “Helping to cut costs in the supply chain would also have a positive flown-on effect to other small businesses and consumers.

“Whether it’s modest income tax cuts or a temporary reduction in fuel excise, both sides appear stuck in a cycle of short-termism, but we need fundamental tax reform to make a substantive difference to economic growth and prosperity in the long term.”

Mr Freeland also supported the Opposition’s pledge to cut regulation where there exists duplication, but warned against allowing first home buyers to access $50,000 from their superannuation.

“This first home buyer measure will not resolve structural housing affordability issues,” Mr Freeland said. “This is more likely to worsen the problem than solve it.”

www.cpaaustralia.com.au

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BUDGET REACTION – AUSTRALIAN business chief executive and author, Jarrod McGrath is calling on the Federal Government to do something to lift Australia out of its “systemic productivity slump” – no matter which party wins the upcoming election.

Mr McGrath made the suggestion – in response to the Budget – that the Federal Government should actually incentivise all levels of government and enterprises toward genuine long-term productivity increases.

Mr McGrath has spent his career in a range of blue- and white-collar roles and led a number of companies. He called the Budget’s $900 million National Productivity Plan “a start” but argues the government should set benchmarks on how organisations can measure workforce management and look closely at rostering, payment, and compliance systems at the heart of productivity. 

“The government has to start incentivising people-focused initiatives to lift Australia out of its systemic productivity slump,” Mr McGrath said.

“This isn’t easy, but we’re walking a tightrope trying to boost productivity while reigning in expenditure – we need to see an informed and creative approach from the top down that recognises that we don’t currently measure workforce management well, and we can’t hope to improve on productivity until we do,” Mr McGrath said. 

“The Budget’s 10-year $900 million National Productivity Plan, to incentivise states and territories to promote competition, is a signal of the government’s intent, but it needs to go further to also incentivise businesses and local government.

“We need benchmarks set by the government on how organisations can measure their workforce management – real-time visibility over rostering, payment and compliance systems at the heart of how people are paid and for what productive output.

“These systems are the backbone of productivity measurement – and visibility is the first step to identifying where the bang-for-buck can be found,” he said.

“The government should lead here with its own workforce and also start incentivising organisations to bring in the tools and technology that can manage their labour force in real time. Once they have that visibility, more incentives can be provided to improve on productivity initiatives based on what they’re seeing."

www.jarrodmcgrath.com

Jarrod McGrath is the CEO of Smart WFM and author of The Digital Workforce and The Modern CEO.

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