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Sally McManus responds to RBA governor’s commentary on housing market
Sally McManus spoke to ABC News Breakfast this morning and gave her thoughts on some of RBA governor Phil Lowe’s commentary around the housing market and what he thinks needs to happen.
McManus says there is a bit of a double standard there:
I think we’re living in two worlds. We’ve got people living in very big houses that have multiple dwellings and they’re landlords. And what they’re doing is when the Reserve Bank governor puts up interest rates, they’re passing on that cost to renters and that’s part of the reason why we’re seeing rents increase.
And I think that that is just basically saying to everyone, look, ordinary people, move in with your parents and grandparents whilst we’re going to say nothing about those CEOs I talked about at companies that actually are the ones that could ease cost of living tomorrow on people but they’re choosing not to because in the end they want to see their bonuses.
Key events
Industry minister Ed Husic has released two discussion papers on how to deal with the growing influence of AI.
The Government’s Safe and Responsible AI in Australia Discussion Paper and The National Science and Technology Council’s paper Rapid Response Report: Generative AI can be found here.
The aim is to establish safeguards over the development and use of the technology.
I would suggest an immediate end to people using it to ‘complete’ the bigger pictures of albums or artwork, because apparently composition and scale isn’t something everyone appreciates, but that’s just me.
Paul Karp
Julie Collins attacks Greens and Coalition over housing bill
The housing minister, Julie Collins, spoke to the Property Council last night, targeting the Greens and Coalition for refusing to pass Labor’s Housing Australia Future Fund bill.
Collins said:
As you would be aware the legislation to establish the fund is currently being held up in the Senate. We’ve heard all kinds of arguments from those opposing the fund. It’s too much. It’s too little. It’s too soon. It’s not soon enough. These excuses will sound painfully familiar for all of you in this room. The very same excuses get trotted out in local councils across the country to stop the development of more housing. And no one is louder than representatives from the Greens political party. The Greens are not alone – the Coalition continue to stand in the way of the Housing Australia Future Fund, holding up desperately needed homes. Labor will not apologise for wanting more for those who need them most. This debate on the Housing Australia Future Fund has made it crystal clear Labor is the only party who will always back more homes. We will continue making this case and continue to talk to other parties and Senators about the Housing Australia Future Fund.
Labor has support from the Jacqui Lambie Network and David Pocock to pass the housing bill. Negotiations continue with the Greens.
The Greens housing spokesman, Max Chandler-Mather, spoke to Joe Hinchcliffe about his local advocacy and the appropriateness of particular housing developments over the weekend.
The flu and Covid season is having a wide impact with people having to cancel their blood donation appointments.
Donors have saved so many lives, including mine and so many people I care about. I’m sure it’s true for you too. If you can, make an appointment to donate.
Around 2,000 blood donors a week are cancelling and rescheduling appointments due to cold and flu symptoms, and it’s expected to get worse in the coming weeks. If you can, please make an appointment to donate blood in June: https://t.co/CZx6fsYuFI pic.twitter.com/rYlHz6Eo2X
— lifebloodau (@lifebloodau) May 31, 2023
James Paterson says response to Lowe’s housing comments ‘a bit unfair’
Liberal senator James Paterson thinks that the RBA governor, Philip Lowe, has received a bad rap for his comments on housing in yesterday’s Senate estimates hearing.
Lowe suggested people go back to sharehousing or live with their family for longer to bring down aggregate demand and higher rents for housing. Rent increases, which Lowe said could get as high as 10% (in the aggregate), are occurring because the RBA is raising rates and those increases are being passed on to tenants. But rents are also one of the main drivers of inflation. So the higher rents go, the bigger its impact on inflation, meaning the RBA once again considers raising rates. And so on and so on.
Paterson said Lowe made the comments after pointing out that while the population had increased by 2%, housing stock had not:
I think people are being a bit unfair. Actually, the substance of his evidence to the committee yesterday was supply is the best solution for the housing affordability crisis that we have. And the best thing we can do is build more homes for more people, and therefore that will help solve the problem. What he did also acknowledge is that that is a slow response, that you can’t build homes overnight, that it takes time and resources and people to do that. And so, he’s just recognising that the falling rate of people occupying homes or the lower number of people occupying homes is putting pressure on the market.
Daniel Hurst
Dfat estimates have begun with Malarndirri McCarthy in the minister’s chair.
She thanks the committee for its understanding and conveys “Senator Wong’s apologies for not being here today following the passing of her father on Tuesday”.
Andrew Leigh plays down inflation concerns
There was obviously a lot of commentary over the monthly inflation rate which came down yesterday, showing a 6.8% increase since April last year.
Fuel drove a lot of that – last April, the Morrison government fuel excise was in place. That expired, so fuel is more expensive compared to last year.
Andrew Leigh said that is one reason why the number, while larger than predicted, is not cause for huge concern.
He told Sky News late yesterday:
The monthly inflation number is just an inflation indicator at this stage. It’ll be a full inflation measure from next year, but right now it doesn’t cover the full basket, so you should expect it to be a little bit more volatile. When you strip fuel out of the equation, then inflation actually falls on this monthly number and the fuel number seems to be largely driven by indexation, which, as you know, happens twice a year. So, I don’t think it’s a major cause for concern. Most economists would agree that the inflation peak has passed.
Potential strike action at Queensland’s Callide and Kogan power stations
The mining and energy union is warning of potential strike action at Queensland’s Callide and Kogan power stations after pay negotiations broke down with a labour contractor over cleaning services.
The union is applying to the Fair Work Commission to take industrial action to address the issue of cleaning contractors being paid $5 less an hour at the Kogan power station compared with those undertaking the same work at the Callide station.
The enterprise bargaining negotiations have gone on for more than two years with no resolution and the union has now lost patience with both the contractor and CS Energy, the government owned corporation in charge of the sites
The MEU Queensland district vice-president, Shane Brunker, says the situation “has the capacity to escalate quickly and affect power generation across Queensland”
Two years is plenty of time to hammer out a deal like this, our members have had it and are ready to down tools.
Either this is resolved in the next few working days or our members will be on the grass, and with their fellow members on site potentially right behind them.
The MEU is calling on the Queensland Labor government to instruct their Government Owned Corporations (GOCs) to audit their books and move full time contract labour back into permanent positions.
The House sitting will begin at 9.30am.
Labor to implement Afghan Lee recommendations
Richard Marles, Penny Wong, Mark Dreyfus and Andrew Giles have announced the government will be implementing all of the recommendations of the review into the Afghan Locally Engaged Employee program (Afghan Lee)
Established on 10 November 2022, the Independent Review led by Dr Vivienne Thom AM has made seven recommendations to improve the design and delivery of the Afghan Lee program. Work to implement the recommendations has already begun.
Consistent with the report’s recommendations and the program’s original intent, the government has expanded eligibility for certification to include security guards and former Afghan government and military officials who were employed with the Australian mission in Afghanistan. Applicants from these cohorts who were previously found to be ineligible will be contacted, where possible.
As part of its commitment to improve the administration of the program, and ensure consistency across government, the Department of Foreign Affairs and Trade and the Department of Defence will undertake a review of relevant historic decisions.
All applicants will still need to demonstrate they were employed with Australia and at risk as a result of that employment, to be eligible for certification.
Greg Jericho has gone through the ABS data on housing and says it provides the answers to the housing crisis – build more homes:
Kylea Tink condemns indexation of student loans
The Independent MP for North Sydney, Kylea Tink, wants an “urgent” review of the indexation of student loans.
Tink has been talking abut this for some time and questioned Jason Clare about it in question time.
Tink says she is being driven by people’s stories, giving the example of a mother who contacted her to say:
The indexation has resulted in terrible stress on my children and other students. Given the current economic environment, this decision is causing their debts to balloon, placing great financial pressure on them. As an example, my daughter (who has two degrees, studied medicine and works in the public hospital system) has a debt that was increased by $14K.
I’ve also been contacted by North Sydney young professionals who point out that because the indexing comes into effect today, they are paying hundreds, and in some cases more than $1,000 in additional repayments.
Cait Kelly has looked at some of the realities of the housing crisis following governor Phil Lowe’s suggestion people go back to share housing or live with their parents:
At 51, Mandy Pritchard does not want to live in a share house, but the unfolding rental crisis means the full-time worker may have to.
It’s a situation the Reserve Bank governor, Philip Lowe, suggested more people would need to consider to bring rents down – telling Australians on Wednesday “we need more people on average to live in each dwelling”.
After splitting with her partner of 19 years, Pritchard – an NGO worker – wants to move from Melbourne to be closer to friends in Sydney or Wollongong, and is being forced to apply for share houses.
ACTU secretary says anyone talking about wage price spirals should apologise
Both Philip Lowe and the treasury secretary, Steven Kennedy, have said there is no wage price spiral (although Lowe said he will be watching) and Sally McManus says that anyone who has been speaking about wage price spirals “should be really apologising”.
The Fair Work Commission is handing down its minimum wage decision tomorrow and McManus hopes it is in line with inflation.
We also know what effect this decision has on overall wages. It has hardly any impact and it has no impact on inflation and we know that over a period of 10 years because you can measure it. It happens every single year. It’s a once-off, just for this year pay rise, and it will just be so people can keep where they are now, not even go forward. If they don’t get the pay rise, there will be more cutting back … If you have less money to spend, that’s less money into [your] local community and that affects businesses. Tomorrow is a huge day and we’re hoping for the pay rise we’ve been fighting for and that’s a 7% increase.
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