My boss wrote a piece in support of migration – and migrants.
It’s good. Makes me proud.
#auspol
grattan.edu.au/news/migrant...
27.02.2026 21:36
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My boss wrote a piece in support of migration – and migrants.
It’s good. Makes me proud.
#auspol
grattan.edu.au/news/migrant...
I would quibble about mandating 2 & 3 bed units - bigger units are undoubtedly costlier and I think it’s easy to forget how many Australians live (or would like to live) alone - but I agree the outcomes in terms of creating denser, family friendly communities in Vancouver are worth highlighting.
Townhouses and flats are just one part of the housing puzzle Australian cities face. But they deserve policymakers’ attention because they’re among the most straightforward opportunities for reform - and we can’t afford to let these kinds of opportunities pass us by. 6/
In R2-zoned areas alone, we estimate that there are more than 400,000 sites in Greater Sydney that could be profitably redeveloped for townhouses, including 37,000 on the Northern Beaches, 37,000 in Canterbury Bankstown, and 18,000 in Ku-ring-gai. 5/
In our research, we find that relaxing these constraints, and allowing multi-family housing of the kinds Victoria already does, would unlock capacity for more than 1 million homes, which could be profitably built today. 4/
By contrast, even after recent low- and mid-rise reforms, the majority of Sydney’s residential land is still subject to restrictive R2 ‘low density’ zoning, where new homes are limited to duplexes at most. 3/
In Victoria, this reform allows for townhouses and flats of 2-3 storeys to be built 'by right' on the vast majority of the city’s residential land. Developments that pass a standard set of built form (and heritage and other) controls cannot be refused by planning authorities. 2/
One of our recommendations was for all states - including NSW - to allow for streamlined approvals of low-rise townhouses and low-rise flats across all residential areas, as Victoria has largely done with its Townhouse Code. 2/
Our ‘More homes, better cities’ report, published last year, showed that while NSW has made important strides in its efforts to allow more homes in the places people most want to live, there’s still further to go. 1/
Excited to have been in Sydney today presenting on some of our research as part of a Grattan Institute event on ‘How to tackle Sydney’s housing crisis’. Here's a short summary🧵
Policymakers are rightly focused on reducing housing costs at the moment. But we shouldn’t loose sight of the need to use the right policy tool for the job. Our current investor tax concessions are inequitable and costly to the budget - it’s time they were reformed.
These impacts could easily be offset by using a small portion of the proceeds from tax reform to fund social housing. Separately, the federal government should pay states directly to reform restrictive planning laws - a major barrier to new housing supply in our cities.
In Grattan’s 2025 Orange Book, we estimate that our proposed reforms to housing tax concessions would reduce property prices by only about 1%. The resulting (tiny) decrease in new housing production would be enough to raise rents by only $1 per week.
For renters, what really matters is housing supply and demand. Low vacancies and long lines for rentals means landlords have more power, resulting in higher rents (and often a poorer rental experience). Whereas high vacancies means lower rents.
This argument is addressed in this great RBA paper from 2024, which found that when interest rates increase, pass-through to rents is minimal: landlords with mortgages raise rents by just 3c for every $1 increase in their mortgage costs.
www.rba.gov.au/publi...
Tax incentives clearly matter for investor behaviour in property markets. But if property investors are trying to maximise their returns, they will charge as much as the market can bear, regardless of the costs they face.
The idea that landlords just ‘pass through’ costs they face onto renters - as is now being argued in the context of capital gains tax reform - is widespread, but misguided. A short thread 🧵
2) The more successful our broader housing policy reforms are at lifting supply, and hence lowering real growth in house prices (an important goal), the less we would raise by shifting from our current flat 50% deduction back to CPI indexation.
Two policy implications to highlight:
1) If we assume inflation of around 2.5% and asset price growth of around 5-7% per year, then for most people, indexation is less generous than our current 50% discount, but more generous than a 25% discount.
This is where some of the recent media reporting on this issue trips up: because it confuses indexation of the cost base with the size of the discount, it implies that the longer you hold an asset the larger your discount. Whereas in many instances, the opposite is true.
By way of example, if you have 2.5% CPI and 5% asset price growth per year, then after 1 year the discount on your gains is 50% - the same as our current discount. But over time the difference between those growth rates compounds, so after 10 years the discount is just 45%.
In the above example, the taxable gain is the same either way. But in reality, how much of a discount the indexation approach provides will depend upon inflation and asset prices. Faster inflation or slower price appreciation means a bigger effective discount on your gains.
Under the inflation indexation approach, you instead grow your cost base with the growth in CPI over the period since your purchase, and then subtract this inflated cost base from the sale price to calculate your taxable gain. See a stylised example above.
When you're taxed on capital gains - whether it's a house or another asset - you're being taxed on the difference between your cost base (mostly the purchase price) and your sale price. Under our current system, we apply a 50 per cent discount to this gain before taxing it.
With the federal budget approaching and speculation again mounting over capital gains tax reform, there's been some discussion about returning to the pre-99 'inflation indexation' approach to taxing capital gains. Here's a quick explainer on how that would work.
While changes to transparency rules from 1 July will help shed light on more donations, there's still more work to do. The expenditure caps for parties are still too high, and are designed in such a way that they advantage incumbents and major parties. 5/
But the picture we have from this data is only partial. More than $140m - 30% of party receipts in 2024-25 - were undisclosed. 4/
The biggest donors to the major parties included party investment funds such as Labor Holdings and the Cormack Foundation, alongside the philanthropist Pam Wall, and unions such as the Mining and Energy Union. 3/
Clive Palmer's Mineralogy was the largest single donor over the period, with over $50m going to the Trumpet of Patriots party - less than his record donations in 2019 and 2022. Coming in a distant second was Climate 200, with around $6.6m in donations to various independents. 2/
Among the two major parties, the Coalition again had a fundraising lead over the ALP last election cycle, as it has at every election since 2007. 1/