National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.

Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.

[smartcode_project:default project_id=145922 project_image_fid=373556]

The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.

Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.

"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.

"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.

"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."

[smartcode_project:default project_id=145922 project_image_fid=373559]

Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.

The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.

[smartcode_project:default project_id=145922 project_image_fid=373583]

Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.

Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.

[smartcode_project:default project_id=145922 project_image_fid=373571]

Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.

Completion of Crest &amp; Walker is slated for late 2028.

[smartcode_project_cta:default project_id=145922]

Joel Robinson

Fortis expands Brisbane pipeline with launch of Crest & Walker in Newstead

The enormity of delivering a true skyscraper in Australia's new development market is often overlooked.

It has taken the best part of a decade since plans for Chevron One were first unveiled, but the 52-storey tower is now complete, with residents collecting their keys and moving into what has become one of the Gold Coast's most recognisable new landmarks.

Rising 127 metres above Chevron Island, Chevron One stands almost twice as high as any other building on the island. Its scale places it alongside the trio of towers at Jewel, arguably the last truly significant addition to the central Gold Coast skyline when they were completed around six years ago.

While there are several developments underway around a similar height to Chevron One, they are more concentrated within clusters of the highest towers in the city. The fact Chevron One sits within a developing precinct, looking back at the other high-rise developments in Surfers Paradise and Broadbeach, makes it a different proposition altogether. It will certainly become a reference point on the Gold Coast skyline.

[smartcode_project:default project_id=6515 project_image_fid=68833]

Developer Bensons Property Group is behind the 52-storey tower, which has just shy of 250 apartments, along with an exhaustive list of resident amenity spread across what is the largest development site ever assembled on Chevron Island.

The tower has been the talk of the town for years, says Ray White Projects Gold Coast agent Caitlin Rosenboom, who is selling the remaining apartments.

"People have been watching Chevron One go up for years," Rosenboom says, adding that many prospective buyers have been surprised by the scale of the views once they step inside.

"It's only when they walk through a completed apartment that they truly understand the position of the building," Rosenboom says.

"The views are jaw-dropping. Whether you're looking east over the ocean, across Surfers Paradise, along the river systems or out to the hinterland, every level offers something different but equally impressive."

[smartcode_project:default project_id=6515 project_image_fid=360215]

One of Chevron One's defining advantages is its location on the eastern side of Chevron Island on Stanhill Drive, a position which protects the views forever.

"There's only one row of houses between Chevron One and the water, and the height restrictions along the river means views from Chevron One can never be built out,"&nbsp;Rosenboom says.

While new apartment developments continue to emerge across the Gold Coast, Rosenboom says opportunities to secure a completed apartment with this level of outlook are becoming increasingly rare.

"The size of the site is something that would be incredibly difficult to replicate today," she says.

"That's allowed Chevron One to deliver the sort of amenity, open space and resident facilities that very few projects can offer. There are not many completed apartment buildings on the Gold Coast right now that can compete with the combination of scale, quality and amenity."

[smartcode_project:default project_id=6515 project_image_fid=68839]

There's around 2,000 sqm of amenity solely for the use of residents of Chevron One. Club One features a uniquely shaped swimming pool that mirrors the footprint of the building itself, set within a extensively landscaped gardens. There's also an indoor pool and spa, a fully equipped gym with a Pilates room, a yoga garden, a bookable private dining area and lounge that can host up to 30 people, and a 24-hour concierge service.

As for the buyers, Rosenboom is fielding enquiry from everywhere: Sydneysiders and Melburnians looking at the new and off-the-plan market following the changes in the Federal Budget, as well as those looking to relocate, through to South East Queenslanders seeking either a permanent home or a weekender bolthole.

"The Gold Coast lifestyle continues to resonate with people relocating from the southern states, and when they see the views and the quality of what's been delivered at Chevron One, it becomes very easy for them to understand the appeal," Rosenboom says.

A diverse mix of one, two and three-bedroom apartments remain available, with each offering "something a little different", be it the orientation and views, configuration, or level, to suit a wide variety of buyers.

The remaining apartments are ready to inspect in person, by appointment.

[smartcode_project_cta:default project_id=6515]

A decade in the making: Residents to move into Chevron One as construction wraps up

A general rule of thumb in new apartment developments is that the penthouses get the rooftop.

It's a formula that's become commonplace across Australia's apartment market. Residents might have access to a pool, gym or barbecue facilities on a dedicated lower level, but the most desirable outdoor spaces are typically reserved for the highest-priced homes at the top of the building.

<a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> has taken the opposite approach.

Rather than dedicating the rooftop to a handful of buyers, the Gold Coast developer has made it the centrepiece of its Flourish collection, creating expansive shared spaces from the best vantage point in the building.

The philosophy has reached its most ambitious expression at <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> in Palm Beach, where two rooftop precincts connected by a skybridge will deliver one of the most extensive lifestyle offerings seen in a residential apartment project on the Gold Coast.

[smartcode_project:default project_id=150017 project_image_fid=374053]

"We're seeing a clear move toward developments that offer more than just an apartment," Sherpa Group founder Christie Leet said.

"People want spaces that support how they actually live, whether that's working from home, staying active, or spending time with family and friends.

"That's where amenity becomes critical. It's not just about what's included, but how those spaces are designed to be used every day."

[smartcode_project:default project_id=150017 project_image_fid=374052]

The breadth of amenity has already attracted buyers across multiple demographics. Younger first home buyers have been drawn to Soleira's one-bedroom apartments, a product rarely delivered in Palm Beach, while families have responded to practical inclusions such as the shallow children's pool adjoining the main lap pool and the extensive communal recreation areas.

Instead of a single rooftop, Soleira delivers two distinct lifestyle zones.

[smartcode_project:default project_id=150017 project_image_fid=372547]

The southern rooftop has been dedicated to wellness, featuring a gym, yoga and Pilates studio, work-from-home facilities, a wellness centre, spa, and hot and cold plunge pools.

The northern rooftop focuses on recreation and entertaining, incorporating a heated resort-style pool, private dining rooms, pizza ovens, barbecues, a golf simulator, children's recreation areas, and what is expected to be the Gold Coast's first rooftop basketball court, which will also double as a squash court.

[smartcode_project:default project_id=150017 project_image_fid=374054]

Beyond the rooftops, Soleira will introduce 1,500 sqm of curated retail beneath the towers, creating one of Palm Beach's first genuinely mixed-use lifestyle precincts where cafés, restaurants and convenience retail become part of residents' everyday lives.

Sherpa has also retained management rights across the development, allowing it to oversee the long-term operation of the building through a 24-hour concierge model. The developer is also exploring additional revenue streams within the precinct aimed at helping offset ongoing body corporate costs for residents.

[smartcode_project:default project_id=150017 project_image_fid=370962]

While Soleira is the largest project Sherpa has delivered, the rooftop-first philosophy has been evolving for several years.

It began with <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>, the first project released under the Flourish brand. Rather than competing at the ultra-luxury end of the market with oversized half-floor and full-floor residences, Sherpa focused on creating lifestyle-driven apartments supported by resort-style shared spaces.

Amargo introduced more than 800 sqm of rooftop amenity, combining wellness facilities, heated pools, entertaining areas, cabanas, pizza ovens and private dining spaces into what was designed as an extension of residents' homes rather than a facility used only occasionally.

[smartcode_project:default project_id=146527 project_image_fid=366550]

That approach continued with Flourish Oasis, where the same amenity-led philosophy was refined into a more boutique development. Strong demand from Sherpa's growing VIP database saw much of the project sold before it reached the broader market, reinforcing buyer appetite for apartment communities centred around shared lifestyle experiences.

Flourish Amargo is slated for completion mid-way-through next year, with Oasis to be delivered by late 2027. Flourish Soleira is expected to complete in 2030.

[smartcode_project_cta:default project_id=150017]

Sherpa takes amenity to the sky as Flourish Soleira captures booming Palm Beach demand

As apartment living continues to evolve across Sydney's growth corridors, the quality and distribution of shared spaces is increasingly shaping how residents experience home. Rather than functioning as add-ons, amenities are being embedded into the daily rhythm of a building, supporting everything from quiet retreat to social interaction, often within a single vertical community.

At <a href="https://www.apartments.com.au/new-apartments/aeris-melrose-park-nursery-street-melrose-park-nsw-2114">Aeris</a> in Melrose Park, this approach is resolved through a layered amenity offering that unfolds from ground level through to its upper podium. Developed by <a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> in partnership with Hankyu Hanshin Properties, the project introduces 468 apartments across two towers and a mid-rise building, positioned at the highest point of the broader masterplan.

[smartcode_project:default project_id=426 project_image_fid=359199]

The amenity experience begins at street level, where two courtyards sit within a landscaped setting that connects residents to the wider network of parks and green spaces. These green spaces are not isolated pockets but part of a wider pedestrian network that links Aeris to the surrounding <a href="https://www.apartments.com.au/developments/melrose-park-nsw-2114">Melrose Park</a> precinct, including Central Park, future schools, and the Town Centre opening in July 2026. The result is a transition that moves from public to private without abrupt boundaries, allowing residents to pass through shaded, tree-lined environments before reaching the building itself.

Moving upward, the focus shifts to the level five podium, where the primary communal facilities are concentrated. This space brings together a 16-metre swimming pool, outdoor seating areas, and a communal BBQ zone arranged to take advantage of elevated outlooks. Seating is positioned beneath pergolas, creating pockets of shade that extend the usability of the space throughout the day. The pool edge aligns with views toward the wider district, reinforcing the sense of elevation that defines the project’s positioning.

In the adjacent building, this is complemented by quieter, more contemplative spaces, including an outdoor cinema set within the same level. Positioned to operate primarily in the evening, it introduces a different tempo to the shared environment, shifting from daytime activity to after-hours use without requiring separate zones.

[smartcode_project:default project_id=426 project_image_fid=360299]

The podium also accommodates an intimate private resident gym. Located on the lower levels, it gives residents convenient access to fitness facilities without leaving the building.

Above, the elevated podium sky deck extends the amenity offering, providing additional open-air spaces with elevated outlooks across the surrounding landscape. While more restrained in program, this upper level reinforces the project’s vertical progression, from ground-level greenery to elevated outlook, allowing residents to move between distinct spatial conditions within a single address.

This distribution of amenities reflects a deliberate response to how residents use space across the day. Sekisui House Australia Sales and Marketing Director Peter Kalaf points to the role these shared areas play in shaping buyer demand. Aeris has been conceived as more than a collection of apartments, with the podium pool, gym and outdoor cinema forming part of a broader lifestyle offering that extends the home beyond each individual residence.

[smartcode_project:default project_id=426 project_image_fid=360300]

What distinguishes Aeris is not the inclusion of these elements individually, but how they are arranged in relation to one another. Active, social, and passive spaces are layered vertically rather than separated, allowing residents to choose between them without leaving the building or moving far from their apartment. This proximity supports both routine use, such as a morning swim or evening workout, and more occasional gatherings, whether around the BBQ area or within the cinema setting.

The amenity design also sits within a broader framework of connectivity across Melrose Park. The Melrose Park Town Centre, anchored by Coles and Dan Murphys, features a mix of retail, dining, health and lifestyle offerings, bringing everyday convenience closer to residents. By the end of the year, more than five hectares of parks and open space, equivalent to around seven football fields of green space on residents' doorstep, will further enhance the precinct, allowing the internal facilities at Aeris to operate as an extension of the wider neighbourhood rather than a substitute for it.

Construction at Aeris continues to gather momentum, with ground floor slabs expected to be completed in late 2026 before the first sections of the buildings begin to rise above ground.

[smartcode_project_cta:default project_id=426]

Elevated amenity anchors daily life at Aeris, Melrose Park

Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/FH_1EzB-1vs?si=XScVlP1ERsTDJoME" title="YouTube video player" width="560"></iframe>

"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

[smartcode_project:default project_id=135096 project_image_fid=356818]

After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/tsioMLcnjas?si=zq-ys3JuWpfa5hFv" title="YouTube video player" width="560"></iframe>

The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

[smartcode_project:default project_id=135096 project_image_fid=356829]

Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

[smartcode_project:default project_id=135096 project_image_fid=351104]

Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Economy

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The Australian Performance of Construction Index has seen the industry's contraction slow over March, with the index up 2.0 points to 46.2 over the month.
The '50 point level' is that which separates expansion from contraction in the industry and it is the third consecutive month since the industry returned to growth that the index has been below this balance level.
The Australian Industry group director - public policy, Peter Burn, said that there was a consolidation of recent gains in the houe building sector. He also noted a recovery of commercial construction.
Despite these positive shoots, a pull-back in the previously bullish apartment building sector and a decline in engineering construction kept the index sluggish.
"As is the case with the broader economy, the rebalancing of the construction sector as mining-related activity slows still has a considerable way to go," said Burn.
He pointed to hopes that momentum can be maintained in the residential construction sectors, with attention to turning to required investment in non-mining related engineering construction.
Meanwhile, Housing Industry Association chief economist Harley Dale noted that despite the positive signs at the close of 2013, it was disappointing to see a full first quarter of 2014 in negative territory.
"The detached house activity component remains expansionary, if only just, and 2014 should be a healthy year for new home building activity," said Dale.
"What the sector and broader economy needs, however, is a sustained recovery in new home building commensurate with average construction levels being considerably higher over coming decades than those achieved over the past 20 years," he said.
"The prospect of achieving this outcome would be significantly bolstered by a national taxation reform agenda which included the removal of the excessive and inefficient taxes levied on new home building."
House building did fall over the month, by 1.4 points, however it remained above the 50 mark - at 50.8, suggesting a stabilisation. Meanwhile, apartment building declined 1.0 points to 45.6 points.
Commercial construction declined by 3.4 points, to 56.5 points, with engineering construction up 5.8 points to 45.5 points.
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House building consolidating as apartment building pulls back: Australian PCI

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Regional banks have called on the Financial System Inquiry to address issues that they say have created competitive advantages for the big four banks in home lending and other financial services.
In a joint submission to the inquiry, Bendigo and Adelaide Bank, BOQ, ME Bank and Suncorp Bank said the fall-out from the global financial crisis had favoured the major players.
“The banking landscape is now characterised by a higher degree of market concentration, consolidation and increasing dominance of the large banks relative to other providers,” the banks noted in their submission, which was prepared with the help of Pegasus Economics.
“While smaller banks and others provide customers with real alternatives and choice when it comes to financial services, these smaller participants do so at a distinct competitive disadvantage.”
Over the past few years, the major banks had become more vertically integrate with mortgage brokers and financial advice networks, which the regional banks’ submission claimed provided advantages in distributing home loans and other financial products.
The regional banks recommended the inquiry consider commissioning the Australian Securities and Investments Commission to survey the market to assess whether the major banks’ multi-brand strategies were confusing consumers about ownership.
“If it is found that confusion does exist, then a strong disclosure obligation must be introduced to ensure customers are making informed decisions,” the banks said in their submission.
The regional banks also noted that significant funding and cost advantages were available to the big banks deemed “systemically important” and that new regulatory and prudential requirements cost more, in relative terms, for the regional banks to implement.
They also claimed that asset requirements under the Basel capital adequacy framework made it more profitable for the big banks than for the regional banks to issue home loans.
The four big Australian banks, which had undertaken advanced Basel accreditation, were required to hold on average 1.3 cents of capital against each $1 of mortgage credit, UBS Securities Australia estimated. Banks operating under the standardised accreditation – including the regional participants – must hold up to three times more capital for the same loan.
The difference in capital requirements meant that the implied return on equity for ANZ to supply a home loan (estimated to be around 50 basis points) was 34.92% while the same mortgage delivered Bank of Queensland a return on equity of just 14.17%.
Other submissions to the Financial System Inquiry did not agree that competition in the mortgage market was inadequate.
The Reserve Bank of Australia in its submission said a good deal of focus had already been placed on competition in the mortgage market since the financial crisis and that competition in the market for small business loans was more of a concern.
“The [Reserve] Bank considers that this market should be the focus of inquiries regarding competition in lending, rather than the mortgage market,” it said.
Commonwealth Bank of Australia and ANZ agreed in their separate submissions that the inquiry should focus on improving the depth and liquidity of debt markets, on ensuring regulatory standards were consistent and on improving consumers’ financial literacy.
ANZ said: “An open market should continue to be the primary mechanism for maintaining an efficient, competitive financial system. Improvements to retail bond markets and removal of interest withholding taxes would promote efficient competition.”
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Regional banks highlight competitive disadvantages in Financial System Inquiry submission

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GUEST OBSERVATION
One of biggest issues to be addressed in last weekend’s WA Senate poll - and perhaps one of the most complex, too - was how best to maintain the state’s growth trajectory through the forthcoming period of transition.
Western Australia has undeniably seen the benefits from sustained economic growth over the course of the resources boom, with the state’s per capita gross income rising to around 50% above national levels in little over a decade.
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/45584/width668/2z8jq8pc-1396569575.jpg" alt="">
Real per capita Gross State Income: WA and Australia, 1992 to 2013
However, the latest economic data does support the view that the WA economy has passed the peak of the construction phase of the commodities boom (characterised by growth in productive capacity, high employment and real wage growth). It is now moving to a production phase in which the state’s productive capacity is “put to work” in driving resource volume and export growth.
Early signs of this transition can be seen in reduced capital investment growth, lower participation and rising unemployment. WA’s unemployment rate has almost always been below the national rate, but there are signs that the unemployment and participation gaps are narrowing.
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/45580/width668/pkb3vxgg-1396569393.jpg" alt="">
Unemployment and labour force participation: WA and Australia, 1991–2013
Relatedly, the changing workforce and skills requirements for WA require careful thought. Skilled migration, whether from interstate or from overseas, can only do so much to meet the changing demand for labour in the state. The shifting industrial composition also requires an education and training system flexible enough to retrain WA workers to match the needs of industry.
Housing policy was also an important battleground in this weekend’s elections.
Industry group affordability indicators published recently suggest that WA isn’t significantly out of line with other states and territories. However, most of these measures dwell on cost burdens for the “typical” family and house, disguising some big economic and social issues facing policymakers.
The Perth housing market has a real problem providing affordable rentals to low income families, or the right types of properties in the right locations. The housing sector points to high construction, regulation and approvals costs as the main impediment to the efficient supply of affordable housing. Whatever the cause, these issues are common topics of conversation for West Australians.
Australia raises proportionately more in direct taxation than the OECD average (around 60%, two thirds of which is personal income taxation) but significantly less from indirect taxes (mainly GST) - 13% against an OECD average of around 19%.
Federal Treasury secretary Martin Parkinson this week rehearsed the positive arguments for shifting the balance of income taxation and GST more towards the latter, but the context is not textbook. If you had to raise more revenue as a government to honour public spending commitments on NDIS, health and schools reform, support the ageing baby boomer population, and defend against falling terms of trade, which would you choose?
<blockquote>
Housing policy was also an important battleground in this weekend’s elections.
</blockquote>
The subtle increases in direct tax revenues through fiscal drag can stretch only so far, and more overt increases in company or personal income taxation face strong political headwinds. It does seem unnecessarily restrictive for the Federal government to deliver effective tax policy in more challenging economic times with its GST hand tied behind its back. However, consumption taxes may be more efficient, but they’re more regressive too.
WA households have experienced significant real incomes growth over the course of the resources boom, not just in absolute terms but relative to the national trend. But this growth hasn’t been distributed evenly, and the impact of an increase in GST tends to fall regressively on lower income earners who are less able to substitute away from consumption.
With the falling allocation of the GST wealth share to WA - down to 4.2% - placing more pressure on the state’s spending program, there is a need to ensure that economic policy responses don’t contribute to further increases in inequality beyond those already seen.
When it comes to GST shares, it’s hard to argue that WA gets out what it puts in. However, whether the GST return to WA is “fair” (or at least reasonable) depends on the position one takes on the redistributive philosophy underlying the allocation of GST shares across states and territories.
Alan Duncan is director of the Bankwest Curtin Economics Centre and Bankwest Research Chair in Economic Policy at Curtin University.<img src="https://counter.theconversation.edu.au/content/25135/count.gif" alt="The Conversation" width="1" height="1" style="line-height: 1.3em;">
The Bankwest Curtin Economics Centre is an independent economic and social research organisation located within Curtin Business School at Curtin University. The Centre was established in 2012 with support from Bankwest (a division of Commonwealth Bank of Australia) and Curtin University. The views in this article are those of the author and do not represent the views of Curtin University and/or Bankwest or any of their affiliates.
The views in this article are those of the author and do not represent the views of Curtin University and/or Bankwest or any of their affiliates.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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Enough talk: the economic policies that WA needs now

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Australia faces medium term challenges of paying for the things it wants to do as a society and finding enough workers as the population ages, Reserve Bank Governor Glenn Stevens says.
Stevens strongly backed Treasury Secretary Martin Parkinson who <a href="/expert-insights/finance/treasury-boss-hints-at-the-need-for-a-broader-gst">this week outlined</a> the huge calls on the budget over the coming years and urged a reweighing of the tax system to rely more on indirect taxes such as the GST.
Speaking in Brisbane, Stevens said it was becoming clear that programs were not fully funded by taxes over the medium term. “Our situation is not dire by the standards of other countries but neither are the issues trivial. A conversation needs to be had about this,” he said.
He described the Parkinson speech as “very important”.
Stevens said it was understandable that with announcements of job losses people focused on where future jobs would come from. But the problem was more likely to be not enough workers, rather than not enough jobs.
At present the number of new entrants to the workforce exceeded those retiring. 10 years from now, those numbers could be roughly equal, without a further rise in labour participation by older people.
“Demographic trends point in the direction of a smaller population working, and a larger proportion needing support in their later years, even as public demands on the finances for the provision of social goods increase.
“That looks like a pretty uncomfortable combination of trends.”
He said the answer to reconciling them was growth. To some extent we would hopefully be able to lessen the problem through higher labour participation, for longer. “But most of all we will need higher productivity of those working. That means making the system as flexible as possible and as encouraging as possible to innovation.”
For Australia one potential source of productivity improvement lay in the fact that across a range of sectors US productivity was much higher than our own. There were possibly substantial “catch up gains” to us by adopting better practices.
To those worried about projected job losses, Stevens pointed out that new jobs “will come from areas that we don’t see yet”.
“In the middle of 1991, at the low point of the last serious recession, people were very pessimistic about future employment prospects. The rate of unemployment was in double digits.
“But today, over 20 years later, there are nearly four million new jobs in the economy as there were then. The rate of unemployment, although it has gone up recently, is just slightly more than half what it was at its peak in the 1990s.
“It’s worth noting that none of those additional net jobs came from manufacturing,” Stevens said.
MICHELLE GRATTAN is professorial fellow at the <a href="https://www.canberra.edu.au/" target="_blank">University of Canberra</a>.<img src="https://counter.theconversation.edu.au/content/25216/count.gif" alt="The Conversation" width="1" height="1" style="line-height: 1.3em;">
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>. 
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Finding workers and money our main worries: Glenn Stevens

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Modern governments believe that during budget framing, it is politically savvy to parade the pain. We saw it with Labor and the Coalition is doing the same.
There are scary scenarios of what would happen without remediation, with warnings about problem areas. Some surprises will be held for the night, but other measures will be strategically “leaked” beforehand.
Tony Abbott, in Perth campaigning for the West Australian Senate election, let it be known he was chairing Wednesday’s meeting of cabinet’s expenditure review committee.
Shadow treasurer Chris Bowen declared it was the first time in Australian history a PM had chaired the ERC, claiming it showed dysfunction at the highest level.
This was nonsense. The government could quickly counter that Bob Hawke, John Howard and Kevin Rudd had also done so.
But it was surprising Abbott gave such a high profile to this “razor gang” meeting.
The ERC is all about nasties and, after all, Labor is making the prospect of deep budget cuts a centrepiece of its WA Senate campaigning. Abbott seemed to be providing ammunition. On the other hand, he could take the view Labor had the bullets anyway so he might as well play the longer game.
Treasury secretary Martin Parkinson publicly chimed into the pre- budget debate with a speech reinforcing the government’s lines about spending growth in the big areas.
But Parkinson also sent a public message to the government for later about what it should do on taxation.
With Hockey shining attention on health and pension costs, Parkinson documented the escalation.
Total Commonwealth spending on health is set to rise from $64.7 billion in nominal terms in 2013-14 to $74.6 billion in 2016-17, and to $116 billion in 2023-24.
The Commonwealth’s three main pension payments - for the aged, those on disability support and carers – will grow at an annual 6% in nominal terms over the forward estimates, adding $13 billion to annual payments by 2016-17, and another $39 billion by 2023-24. “Of this nearly $52 billion in additional payments in 2023-24, compared to 2013-14, over half is a result of indexation with the remainder due to increases in the number of recipients.”
That seems a fair hint that both drivers are being looked at. It should be remembered that successive governments have been trying to curtail the numbers on the disability pension but it has seemed a losing battle. It’s never as easy as it looks in theory.
Parkinson then turned to the tax side. His argument, aimed well beyond this budget and directed squarely at the political masters he will leave in December, is crystal clear. Australia needs a tax system it relies more on indirect tax, less on direct tax. The king of indirect taxes is, of course, the GST.
Parkinson pointed to one rather surprising fact, given the tax debates we’ve been through over many years. “Despite reforms that broaden the tax base (such as the GST), and decisions that have lowered corporate and personal tax rates across the decades, the share of direct and indirect taxes (as well as Australia’s reliance on income taxes) has changed little since the 1950s.”
Australia had relatively high reliance on direct taxes as a proportion of revenue raised compared with other OECD countries, he noted, before observing that: “Research consistently says that reduced reliance on income taxes and increased reliance on other, more efficient sources of revenue, including indirect taxes, can support higher growth and higher living standards by increasing workforce participation and lifting productivity.”
The problem is that “without conscious change, Australia’s tax mix will move in the opposite direction as personal income tax increases through fiscal drag”.
“We will move even further in this direction if, as we anticipate, the relative share of total indirect taxes (including GST) continues its long-term decline. Contributing to this decline is the non-indexation of fuel excise (unlike other excise rates) and a rising proportion of consumption outside the GST net, for example, in increased health expenditure.”
Parkinson warned that “continued increases in the personal income tax burden will hit lower and middle income earners with higher marginal and average tax rates. This will have adverse labour force participation impacts, while sharpening incentives for tax minimisation by higher income earners”.
The globalised economy meant Australia would be under pressure to cut the company tax rate.
“Given the pressure to return fiscal drag and to reduce the burden of corporate income tax, it will be a challenge to maintain the current levels of revenue over the medium term, let alone the increases required to achieve the budget projections.”
In the past, Parkinson said, tax reform had largely been pursued through broadening tax bases as an offset for lowering tax rates.
“However, a key challenge for the upcoming White Paper on Taxation will be to consider the mix of taxes, including whether there is a role for a greater contribution from indirect taxes.”
The opportunity were there to plot a path to a better tax system and the dangers clear if it was not done.
“If we do not start making these changes and simply keep drifting along we will be increasingly vulnerable to the next global crisis and will also lose out on the opportunities presented by the rising Asian middle class. The exceptionalism of this ‘lucky country’ will become just a distant, ironic memory and our children may really end up ‘doing it tough’”.
So there you have it. Parkinson, axed by the government (though extended until year’s end) won’t be around for the battles after the white paper, which has a long time table.
But he has signposted another lot of unpalatable truths. In terms of painful decisions ahead, this budget is only the start of it for the Abbott government, which hates the idea of tax increases, fears the politics of a robust debate about needing a higher, broader GST and has promised to take any major tax changes to the election.<img src="https://counter.theconversation.edu.au/content/25161/count.gif" alt="The Conversation" width="1" height="1" style="line-height: 1.3em;">
Michelle Grattan is professorial fellow at the <a href="https://www.canberra.edu.au/" target="_blank" style="line-height: 1.3em;">University of Canberra</a>.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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Treasury boss hints at the need for a broader GST

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We’ve now entered the traditional pre-budget softening-up period in which treasurers engage in expectations management ahead of the fiscal set-piece of the year in May. But even given that, Joe Hockey is treating us as complete idiots.
The line Hockey has been pushing for some days now, and which he gave a big push to yesterday in a flurry of media appearances, is that not merely did Labor hide the level of deficits in the current budget cycle, but that it left a series of hidden spending commitments in the unpublished years beyond forward estimates. Hockey has been circulating a document to journalists portrayed in the media as a “Treasury analysis” that shows how “the Coalition inherited an unsustainable budget position” and Labor “hid [expenditure] from the public”. Hockey would like us to see him as a budgetary innocent who has found himself in the middle of a fiscal minefield planted by Labor.
<a href="https://media.crikey.com.au/wp-content/uploads/2014/04/BRIEFING-NOTE.pdf"><img class="aligncenter size-full wp-image-431677" src="https://media.crikey.com.au/wp-content/uploads/2014/04/2014-04-01_11-33-411.jpg" alt="" width="520" height="180"></a>
Well <a href="https://media.crikey.com.au/wp-content/uploads/2014/04/BRIEFING-NOTE.pdf" target="_blank">here’s the document</a>, and it isn’t a “Treasury analysis” — it’s prepared by Hockey’s media adviser, former Australian Financial Review journalist Gemma Daley. And if Hockey seriously expects us to believe his latest argument, he must have nothing but contempt for us. This is Hockey yesterday: “We didn’t anticipate that everything else would be of equal or larger scale as a tsunami coming across the water. The fact is Labor’s left us with a massive forecast increase in foreign aid, a massive increase in defence – for example in one year, there’s meant to be a real increase in defence spending of 13%, a 66% increase in foreign aid.”
<blockquote>
Hockey would like us to see him as a budgetary innocent who has found himself in the middle of a fiscal minefield planted by Labor.
</blockquote>
At another media conference, he said: “If no action was taken on the budget, what the fifth-year deficit would look like, contrary to what both Labor promised was a surplus, if no action was taken, based on the approximately 6% increase in expenditure between the fourth year and the fifth year, which Labor locked in on NDIS, on Gonski, on overseas aid, on hospitals, on defence …”
Well, um, tsunamis are actually tiny when they’re on the ocean — but never mind that, let’s look at the detail. Labor in fact revealed the funding for the National Disability Insurance Scheme — or DisabilityCare as it had been renamed — in the budget last May, with new spending broken down out to 2019:
<img class="aligncenter size-full wp-image-431667" src="https://media.crikey.com.au/wp-content/uploads/2014/04/2014-04-01_11-24-28.jpg" alt="" width="501" height="179">
In addition to the numbers in the budget papers, there was a specific “glossy” with funding graphs for <a href="https://budget.gov.au/2013-14/content/glossy/NDIS_policy/download/NDIS.pdf" target="_blank">DisabilityCare</a> and one for <a href="https://budget.gov.au/2013-14/content/glossy/gonski_policy/download/NPSI.pdf" target="_blank">education funding</a> as well, which was still being finalised in deals with the states. The increase in foreign aid was also in both the budget papers and a <a href="https://budget.gov.au/2013-14/content/ministerial_statements/download/AusAid_MS.pdf" target="_blank">ministerial statement by Bob Carr</a>  — not that the government got any credit for it, because it was actually a reduction, with the government’s Millennium Development Goal commitment to lifting foreign aid to 0.5% of gross national income put back another year to 2017. The government spelt out its planned increase in foreign aid up to and including 2017-18.
In fact in question time last week, Labor invited the Prime Minister to spell out the government’s MDG policy, which he duly did: aid is to reach 0.5% of GNI when the budget returns to surplus. Which raises the question of why, in Hockey’s Mid-Year Economic and Fiscal Outlook in December, Hockey left Labor’s MDG aid funding increase intact, in defiance of the government’s own policy. The answer, of course, was that it would inflate the budget deficit for 2017 and beyond.
As for defence, the Gillard government <a href="https://www.minister.defence.gov.au/2013/05/14/minister-for-defence-budget-2013-14-defence-budget-overview/" target="_blank">gave the portfolio a “guidance”</a> that it would receive around $220 billion in the six years from 2017-18, which Hockey’s document proposes to mean funding would leap 13% in 2017, when in fact the “guidance” reflects a growth rate in defence spending from 2017 lower than the average between now and 2017 of nearly 7%. And remember that Labor was repeatedly criticised fordecreasing defence spending — every armchair general and arms industry lobbyist in the joint was whinging about how we weren’t spending enough taxpayer money on buying gear from the US military-industrial complex. “Military spending slumps to 1930s level,” The Australian’s <a href="https://www.theaustralian.com.au/opinion/columnists/military-spending-slumps-to-1930s-level/story-e6frg74x-1226352458112" target="_blank">Paul Kelly shrieked</a>. The 1930s theme — hint,appeasement!­ —  was picked up by the Coalition, including Tony Abbott and Barnaby Joyce. Abbott “aspired”, he said, to lift defence spending to 3% of GDP.
So, Labor were both neo-Chamberlain surrender monkeys for not spending enough on defence when in government and now, magically, reckless spendthrifts who committed too much to defence at the same time.
Hockey’s fiscal innocent act is a little hard to believe given we were told what an exhaustive, indeed exhausting, shadow ERC process Hockey was leading within the opposition at the time to establish its fiscal credibility.
And above all, there’s this point: if Hockey seriously believes his own claims about the budget beyond forward estimates, why did he remove Labor savings measures that offset future spending? Why did he remove the 15% tax on superannuation income over $100,000 a year, costing the budget billions beyond forward estimates, for the benefit of high income earners? Why did he restore the Fringe Benefits Tax rort on novated leases — remember Joe being photographed in front of a sports car? And why have Hockey and his leader pushed for the abolition of the mining tax, which even in its crippled form, according to Hockey’s own MYEFO, is worth more than $3 billion over forward estimates? Eventually it will be the only way of recovering some of the profits offshore owners of LNG and iron ore projects will make and ship overseas (over 60% of these projects are foreign owned or controlled).
Then there’s the silly decision to hand $8.8 billion of borrowed money to the Reserve Bank in one hit, when it doesn’t need the capital. And the sale of Medibank Private — a $4-5 billion contribution to the budget — will be spent on roads because Abbott wants to be an “infrastructure prime minister”, when it could cut the budget deficit or the debt. That could be $13-14 billion off the deficit and debt right there — or an interest saving of more than half-a-billion dollars a year.
Hockey is talking about sharing the budget burden around, but that’s only after the government plans to increase its own spending for political purposes and sought to hand billions of dollars in tax revenue back to foreign mining companies, large carbon emitters and the well-off in the community — revenue that would have offset exactly the spending on education, disability and foreign aid that Hockey is now claiming to have only just discovered.
This article originally appeared on <a href="https://www.crikey.com.au/" target="_blank" rel="nofollow">Crikey</a>.
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bkeane-XQ2u7CA6bB

Joe Hockey treating Australian public as fiscal fools ahead of the federal budget

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The Reserve Bank has kept rates on hold today, at a record low 2.5%. While debate rages over what might happen next, it appears many are predicting a rise in the last quarter of the year.
RP Data's Tim Lawless noted that the housing market statistics are likely to be the factor causing the Reserve Bank some additional deliberation.
"Dwelling values were up 2.3% in March taking the cumulative increase in dwelling values to 15.8% over the current growth cycle which commenced in June 2012," he said.
"While the headline growth rate is very high, it is really Australia’s two largest cities, Sydney and Melbourne, which are responsible for driving such high capital gains.  Dwelling values are up 22% and 17% across these two cities since June 2012."
He noted that it's not just these capital gains that will be a concern, but the amount of investment in the market, with investors comprising 38% of all new housing finance commitments. The last time investor numbers were this strong was before the housing boom in 2003.
"Clearly the rate of value appreciation across the Australian housing market has been unsustainably strong over the short-term, however the national economy is seeing a great deal of benefit from the increased level of both developer and buyer confidence which the RBA is likely to see as a positive outcome from the currently exuberant housing market conditions," he said, pointing to a potential increase in the future if value growth continues along its current mark.
"If value growth continues along the current trajectory through I think the Reserve Bank will be forced to take action to quell the level of exuberance via higher interest rates," he said.
This ties in with Property Observer's previously reporting an <a href="/expert-insights/finance/borrowers-warned-of-interest-rate-hikes-by-late-2014">increasing number of economists pointing to a late-2014 increase</a>.
Meanwhile, L Janusz Hooker, deputy chairman of LJ Hooker, said that leaving the cash rate at 2.5% should assist prices stabilising following a year of growth. Hooker also siad that the rate easing cycle is over.
"We have been seeing the benefits of those cuts every weekend at open inspections, people are still out house hunting or looking for investment properties," said Hooker.
"Buyers know it is likely rates will be on the increase some time in the next year and are factoring it into their budget."
Michelle Hutchison, money expert for Finder.com.au said that it's cheaper than ever to switch home loans at present, making the RBA's decision to keep rates on hold good news for consumers.
"More lenders are waiving application fees now than they were three years ago, and coupled with the banning of early exit fees on variable home loans in 2011, it's now cheaper to refinance than what borrowers may think," said Hutchison.
"The average cost to switch now out of variable loans that charge these fees is $719 compared to almost $900 in 2011," she said, noting that borrowers shouldn't wait for any further cuts from the Reserve Bank before seeking out a better deal.
The lack of change today was <a href="/expert-insights/finance/paul-bloxham-expects-rba-to-keep-rates-on-hold-next-week">also predicted by HSBC's Paul Bloxham last week</a>.
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Reserve bank holds interest rates, but property prices make an increase likely

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Glenn Stevens' April statement:
At its meeting today, the Board decided to leave the cash rate unchanged at 2.5 per cent.
Growth in the global economy was a bit below trend in 2013, but there are reasonable prospects of a pick-up this year. The United States economy, while affected by adverse weather, continues its expansion and the euro area has begun a recovery from recession, albeit a fragile one. Japan has recorded a significant pick-up in growth. China's growth remains generally in line with policymakers' objectives, though it may have slowed a little in early 2014. Commodity prices have declined from their peaks but in historical terms remain high.
Financial conditions overall remain very accommodative. Long-term interest rates and most risk spreads remain low. Equity and credit markets are well placed to provide adequate funding, though for some emerging market countries conditions are considerably more challenging than they were a year ago.
In Australia, the economy grew at a below trend pace in 2013. Recent information suggests slightly firmer consumer demand over the summer and foreshadows a solid expansion in housing construction. Some indicators of business conditions and confidence have improved from a year ago and exports are rising. But at the same time, resources sector investment spending is set to decline significantly and, at this stage, signs of improvement in investment intentions in other sectors are only tentative, as firms wait for more evidence of improved conditions before committing to expansion plans. Public spending is scheduled to be subdued.
The demand for labour has remained weak and, as a result, the rate of unemployment has continued to edge higher. It will probably rise a little further in the near term. Growth in wages has declined noticeably. If domestic costs remain contained, some moderation in the growth of prices for non-traded goods could be expected over time, which should keep inflation consistent with the target, even with lower levels of the exchange rate.
<blockquote>
Credit growth is slowly picking up. Dwelling prices have increased significantly over the past year.
</blockquote>
Monetary policy remains accommodative. Interest rates are very low and savers continue to look for higher returns in response to low rates on safe instruments. Credit growth is slowly picking up. Dwelling prices have increased significantly over the past year. The decline in the exchange rate from its highs a year ago will assist in achieving balanced growth in the economy, but less so than previously as a result of the rise over the past few months. The exchange rate remains high by historical standards.
Looking ahead, continued accommodative monetary policy should provide support to demand, and help growth to strengthen over time. Inflation is expected to be consistent with the 2–3 per cent target over the next two years.
In the Board's judgement, monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target. On present indications, the most prudent course is likely to be a period of stability in interest rates.
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