Jennifer Westacott interview with Thomas Oriti, ABC NewsRadio

15 May 2023

Event: Jennifer Westacott interview with Thomas Oriti, ABC NewsRadio
Speakers: Thomas Oriti host, ABC NewsRadio; Jennifer Westacott chief executive, Business Council of Australia
Topics: Housing Australia’s Talent paper; planning; migration; China


Thomas Oriti host, ABC NewsRadio: Jennifer Westacott is the CEO of the Business Council who joins us now. Jennifer, good morning. Thank you for your time.

Jennifer Westacott chief executive, Business Council of Australia: Good morning, thank you. You're welcome.

Thomas: So, migration, we’ve been hearing a lot about that recently. Peter Dutton in particular in his budget reply late last week. But in your view, I want to ask you about supply in a minute. But first to migration, how does migration factor or not factor into the housing issues we've been seeing across the country in your view? What impact does migration have on housing?

Jennifer: Well, I think the thing is that what we've released today shows that what we've been doing for the last few years is declining supply and we'll come back to that. But two thirds of Australians want well managed migration, they know that it's important. Most people are experiencing a crisis in getting labour, that's putting costs up. So, we've got to separate the two issues to really have a proper national debate about this. Because a lot of the migration that we've seen in the budget – the 400,000 figure – is temporary migration, so a lot of that is students and they're taking the jobs in hospitality and retail. Those sectors are under a lot of pressure to find labour, so they're actually filling spots that are needed by small and large businesses.

Thomas: They still need a place to live though.

Jennifer: Of course, they do. It's not to say there's no impact, we've got to make sure we get the right problem solved. The problem we've got to solve is that our housing supply has been going backwards. We don't have enough diversity of housing products, things like build-to-rent. We haven't really modernised our housing system for a long time in this country and that's what our paper is calling for.

Thomas: Yes, when I look at it. I guess I don't want to overly simplify your report. But basically, Australia's not building enough homes.

Jennifer: It is that simple.

Thomas: Sure. I didn't want you to take offence to me being so concise, but it's good to know. Should there have been more of a focus on housing in the past, so we didn't get to this point? Did the previous government or governments drop the ball on this?

Jennifer: We could have used the COVID period where migration fell dramatically, to get our house in order, to pardon the pun. We could have used that to kind of get land rezoned, we could have gotten a lot of rezoning done. We could have got all the planning stuff in place so that when things started to recover, both in respect of the economy, we were ready to go, houses were being built. But as usual, we take too long to get anything done. What we're calling for today is that National Cabinet really give this a focus. Because this is not just a federal issue, this is a state issue. Because a lot of state planning systems are the culprit here. We need to get our act together in terms of rezoning more land, in terms of getting those planning approvals done more efficiently, in terms of giving people what we call an as-of-right approval. So, if you've got a house in a residential zone, why do you need to go through six or 12 months of approvals to build a house in a zone called residential? That's ridiculous. Getting more medium density stock and then looking at, which is why we're calling for summit, new products like build-to-rent. How much could we do? How do we make renting a long-term option for people? As opposed to what it is now, which is a short-term kind of transit option. It should be like it is in other countries, a long-term option. How do we do that? How do we finance it? So that's the summit bit, but in the meantime let's get stuff approved. Let's get housing on the ground. Let's look at some of the taxes and charges that add to the cost of the house before a brick is even laid. That's the plan that we're calling for.

Thomas: Let's break that down. The government would argue, I imagine, hang on we are taking this seriously. Anthony Albanese when he was elected a year ago, in his victory speech named housing as a key priority, $10 billion behind it now. It's not going amazingly well in parliament at the moment, but it seems you've really singled out problems in the planning systems. Is that an area you think is being ignored here in terms of, as you worded it a minute ago, the zoning issues? Can you just elaborate on what some of the problems are there?

Jennifer: Zoning and planning approvals. So zoning is obviously where you say that piece of land is going to be able to be used for housing or industrial or whatever. And planning is the time it takes to actually process a development application. They are both just taking too long. Particularly in what's called infill developments, around railway stations and transport nodes, we should be lifting the density there, not to high density, but to medium density. We should be getting those approvals done more quickly. That encourages the building industry to make investments. But what I hear from the building industry, they just say, Jennifer, it takes too long. It takes too long to get things approved, then there's these taxes and charges by the time they actually start building the house, a couple of $100,000 has been sunk into taxes and charges. Now some of those are legitimate, states need to recover their money. They need to pay for transport. We just need to stand back and think about the whole system. With respect to the bill that's in the Senate, stuck in the Senate, that bill should pass. We need to do something about social and affordable housing. That bill is very thoughtful, it's very careful. It's been done in a way not to inject a huge amount of money into the market, which I think is what the Greens are calling for. Get the systems right, get that right, while you've got this permanent fund. So, I don't know why this is being held up in the Senate, it doesn't make sense to me, we should just get on with it.

Thomas: Is that because it’s lacking support from both the Coalition and the Greens, both completely separate sides of the aisle and different sides of the aisle….

Jennifer: But for different reasons…

Thomas: For different reasons indeed, but how do you feel about the fact it's just so tied up in the Senate? I guess, if it doesn't pass we could get nothing.

Jennifer: I think people have to stand back and say somebody out there today in the real world is really just struggling to pay their rent, pay their bills and put food on the table for their kids. And they need a permanent social housing place so they can live without that fear of being evicted and being not able to pay their rent. We need more social housing stock. This is the first thing I've seen in Australia, and I used to run the Housing Department so I know a little bit about it, where we've really put some serious money on the table. We’ve put it in in a way that the $10 billion fund, so we’ve got money rolling out over a long period of time, rather than just a one-off hit. So, I would say to people in the parliament today, think about the fact that we have been really behind the market on social housing. Let's get our act together. Let's take the steps to get there. Let's make sure we do this properly. Let's pass the bill and get our social housing system back on track.

Thomas: Build-to-rent, I just want to ask you about that while we've got you there Jennifer Westacott. You mentioned this a minute ago, and you're calling for this summit on how to get more build-to-rent schemes going.  I guess it's self-explanatory in a way. But what do we mean by it? And why is it important?

Jennifer: It's a good question because it basically means that I'm building, if I'm a developer, I'm building stock that is going to stay as rental stock. So mostly when I build a block of units or something, basically, people buy that, and then they might rent it out to somebody else. This would be you're building it to rent. And you're building it for long term rental accommodation. Now they do this in many other countries, they also do a lot more social housing and other countries. So, we just need to say, okay, is this viable? How do we make it viable? What are the tax arrangements? What are the financing arrangements? Is this something industry super funds would be interested in investing in?

Thomas: Sorry to interrupt. Would it be seen as lucrative for some of those stakeholders and property developers? Is it a more lucrative option?

Jennifer: I just think it's more a long-term rental option. Obviously, people have to make a return. But this is really about getting more rental stock into the marketplace and looking at different ways of financing. Looking at different ways that you actually arrange the tenure for people who live there. Looking at the zoning requirements, making sure you can sort up-zone some areas so that they can do this. It's just really, I think, just to put another product into the system. At the moment we've got social housing, rental housing, which as you said in your introduction is really hard and then buying your own home. If you look at other countries, they've got rental housing as a long-term option for people not just people on low-incomes. People who may not want to buy a house for whatever reason. Can't afford to buy a house but can afford rental over a long period of time. It's that sort of product we need to do more of. The other thing we’ve called for is that we investigate doing more innovation around the housing materials that we're using or the way we're actually building housing. Lots of countries around the world do more prefabricated housing. What I'm talking about there is extremely high-quality housing that's basically modular, and you just put it on the site. So, if you've got an old house, you knock it down, you can maybe put two houses on that site. All of these things we need to think about as well as the crippling stamp duty taxes that people pay when they want to change their house. Let's have a think about how that stamp duty actually is basically stopping people moving around. Slugging people when they buy their home, that really needs to be looked at by National Cabinet.

Thomas: I think there would be a few people out there who might agree with you on the stamp duty issue, no question. We are almost out of time I’m afraid but I just want to ask you another issue, if you don't mind. Last week, the Trade Minister Don Farrell visited China, very much in an effort to resume relations there. I just wanted to get your thoughts on that before I let you go. How important is it for things to get back on track? Have you heard any updates within business as to whether there have been any developments there?

Jennifer: Well, I think all the developments have been made public. Look, I think it's important to get that relationship back on track. I don't think it's going back to where it was. I mean, China's a different country than it used to be. But it's a hugely important part of our economic future. We've got to make sure we do it on our terms, what I call principled realism, where we stay with our principles, but we're really realistic about the huge growth opportunities that are there. At the same time, we've got to look at places like India and Indonesia, these huge markets that are growing, make sure we're diversifying into those markets. But China is a really important part of our future. It's great to see that we're re-establishing those dialogues, but I think we've got a long way to go.

Thomas: It's a pleasure. Jennifer, thank you very much for joining us.

Jennifer: You're very welcome.


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