$900m productivity boost a win for housing and business investment

At the address to the Australian Business Economists, Treasurer Jim Chalmers outlined plans for ‘building a new economy on five pillars of productivity’.

These five pillars are:

1. Creating a more dynamic, competitive, and resilient economy.
2. Building a skilled and adaptable workforce through university reforms, fee‑free TAFE, record investment in skills, reforms to income tax and student loan repayments that support participation, and changes to the migration system.
3. Harnessing data and the digital economy by expanding the NBN into regional areas, unlocking access to advanced satellites and national data assets, investing in technologies of the future like quantum computing, and expanding the Digital ID.
4. Investing in the net zero transformation, unlocking $67 billion in private investment through the Capacity Investment Scheme, improving household and business energy efficiency, and introducing a new vehicle efficiency standard.
5. As our population ages and the care economy expands, delivering quality care more efficiently by reforming the NDIS to ensure its sustainability, providing more Australians with aged care services at home, building a world‑class health technology assessment framework, and making it easier for Australians to see a doctor.

Among the initiatives the government is investing in to reach these goals is a $900 million investment into a National Productivity Fund.

This aims to boost competition and productivity across the economy, with some key areas of focus including streamlining commercial planning and zoning and removing barriers to the uptake of construction.

Property Council Australia CEO Mike Zorbas welcomed the fund, saying it will help “boost home construction.”

“This housing crisis demands we pull every lever, and making our planning systems fit for purpose is the golden lever. State Premiers and Planning Ministers have a mighty housing supply challenge in front of them,” he said.

“We would have 1.3 million extra homes today if our planning systems retained the efficiency they had in the 20 years before 2001. Rewarding state and local government housing supply innovations should be top of mind alongside boosting last-mile infrastructure and addressing taxes that hinder investment and reduce affordability.

“With welcome and much-needed Federal funding for social housing, planning reform and housing infrastructure, this new fund will help to cut through housing red tape and boost home construction. The Property Council also welcomes the additional focus on prefabricated and modular homes in the fund. We need large-scale supply chains, substantial investment and regulatory reform to put industrialised construction on the front foot in Australia.”

HIA managing director Jocelyn Martin acknowledged the benefits of the fund, while also recognising that for it to be effective, the focus must be on “cutting red tape.”

“This fund offers significant incentives for states to reduce regulatory barriers and roadblocks to unlock greater housing supply delivery. One of the most significant issues our industry faces right now in meeting new homes targets, is the layers upon layers of regulation that builders need to navigate prior to obtaining approvals to build and putting a shovel in the ground,” said Martin.

“Not only are these layers of red tape adding significant time to the building approvals process, but they are adding excessive costs that directly impacts on housing affordability.

“Today’s announcement is important initiative to help unlock further housing supply. It illustrates that there is no single solution to these issues, and instead reforms and targeted measures across all areas of policy are needed to address the nation’s housing needs.”

Also addressed in Chalmers’ announcement was business investment. He said that the downturn in productivity is linked to a decline in business investment. The government’s plan aims to boost investor activity to help revitalise the economy.

“We are helping give investors the clarity and certainty they need to unlock growth and productivity in our economy. Our primary responsibility is to create the conditions for sustained growth. This starts with strong macro-economic foundations – which is why we place a premium on responsible economic management,” said Chalmers.

“But government also needs to create an enabling environment for investment – with clear regulations, well‑functioning markets and streamlined approval processes. There is more work to do but our sustainable finance strategy, climate‑risk disclosures and foreign investment approvals overhaul all help here.

“And our Future Made in Australia agenda is about capitalising on the golden opportunity the net zero transformation presents us by attracting more private capital, not replacing it. That’s why we announced in the Budget we would establish a new single front door, as a central point of contact for investors looking to deliver transformational projects in Australia.”

This ‘front door’ will sit “within the treasury portfolio” and has three key functions: prioritisation, investment concierge, and regulatory facilitation.

“It will prioritise proposals that represent transformational opportunities, using transparent and robust criteria. For selected projects, it will play a central role in coordinating approvals across government. And where there’s a role for government investment, it will work with existing government investment vehicles and agencies to support and speed up final investment decisions,” said Chalmers.

“The single front door will make it easier and faster for investors to navigate government and regulatory systems. All projects will have access to clearer and more accessible information, while major or nationally significant projects will get access to bespoke concierge and facilitation. The status of a project will depend on its alignment with the government’s strategic objectives, including our Future Made in Australia priorities and the focus areas of our co‑investment funds.

“It will also depend on a project’s size, viability and maturity, its potential contribution to the national economy, local communities and supply chains. Consultation on the prioritisation criteria and regulatory facilitation will be a focus of the next Investor Roundtable I host on November 22. We’ll continue consulting with investors, industry, unions, states, territories and communities ahead of rolling out its initial services from the second half of next year.”

Jack Campbell is the editor of Broker Daily. After graduating from the University of Wollongong in 2022, Jack began his journalistic career working on Broker Daily’s sister brand, HR Leader. In August 2023 he was made the news editor and worked alongside some talented journalists writing articles and recording podcasts.

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