There are few property developers nationally that can boast a workbook like the ASX-listed developer Cedar Woods. With eight apartment buildings under construction across four states, Cedar Woods is well positioned to take advantage of what Managing Director Nathan Blackburne says is a “national shortage of apartments.”

Cedar Woods purposefully has a diversified portfolio of apartments, townhouses, commercial, and residential communities across the country, enabling the business to remain resilient through market cycles and respond to shifting buyer demand.

Blackburne says there is a great shortfall of housing of all typologies, none more so for apartments. He says that is the case particularly in Perth, where the lack of new apartment projects has been particularly acute.

“Perth has been more affected than Melbourne,” Blackburne explains, noting that over the past five years, “very few new apartment projects” have been launched in either city. Historically, apartments made up around 20 per cent of new housing nationally. Cedar Woods estimates that figure has fallen to around 10 per cent today, a gap they believe must close.

<h2>Apartment appeal rebounding as supply shrinks</h2>

There are signs the tide is turning however. Blackburne says buyer apartment sentiment really picked up in mid 2025. “In October we saw our strongest sales month for apartments in Perth.” The buyer demand has driven their Subiaco apartment development, Incontro, to nearly 70 per cent sold. The increased buyer sentiment has strengthened Cedar Woods’ confidence in bringing forward the next apartment project in Western Australia, a three tower development planned for the prime site on Upham Street in Subiaco, adjacent to Incontro.

Demand is being driven by several factors; the lack of new apartments coming to the market, the increased demand with migration far outstripping the aforementioned supply, and the appetite to live closer to the city.

“Over the past three years, Perth’s population has grown by around 250,000 people, while only around 50,000 dwellings have been delivered,” Blackburne says, adding that more than twice that number would be needed just to keep up.&nbsp;

He said that many buyers are being forced to the urban fringe because of the greater supply of land product, but that, Blackburne argues, is pushing the fringe further out and motivating a re-evaluation of the value of inner- and middle-suburb apartments.

Demographic shifts are helping drive this rethink. Cedar Woods is seeing more boomers downsizing, young professionals entering the market, and a rising number of single-person households. There’s also a growing trend of parents buying apartments for teenage children, motivated by fears that housing prices will become out of reach. “It’s not only a strong investment now, but it can serve as a first home when their children move out.”

<h2>National diversification strategy</h2>

Cedar Woods’ strategy is not limited to Perth. Blackburne outlines their aim to diversify by price point, product type, and geography, which “gives us a broad customer base and smoother earnings profile.” Throughout their markets, they’re combining apartments, townhouses, and masterplanned communities, allowing flexibility to pivot toward undersupplied segments as demand evolves.

In Victoria, Cedar Woods is pressing ahead with a major site in Fairfield, just northeast of Melbourne’s CBD, a site which Blackburne says the company has had its sights on for many years. They are planning to deliver three towers with over 300 apartments, with the plans likely to be submitted in early 2026.

Blackburne also expresses optimism about broader inner-Melbourne supply dynamics. 
 
“While Melbourne’s apartment market is better supplied than Perth’s, and population growth remains strong, Cedar Woods believes the current stock will be absorbed quickly,” Blackburne says, however he warns that policy disincentives remain. “In Victoria … there are quite a lot of obstacles for apartment buyers,” he says, adding that the industry is working with the state government to “remove those barriers” and avert prolonged undersupply.

Cedar Woods has plans on the desks of the VIC Government to develop a 20-storey tower in Southbank, in the heart of Melbourne’s arts precinct. Designed by Rothelowman, the proposed tower will deliver 180 apartments, ranging from studios to three-bedrooms, along with creative amenity space devoted to arts and digital industries, a food and drink tenancy at street level, and a 700sqm recreation deck with indoor lounge space will provide a resident amenity hub.

Blackburne frames the project as a response to Melbourne’s growing undersupply of signature inner-city living. “We saw a thematic: a looming undersupply in inner-Melbourne, particularly in high-quality apartments, and wanted to capitalise on that,” he says. The site’s proximity to the Melbourne Arts Precinct, key tram lines, and Southbank’s cultural fabric makes it especially appealing, Blackburne says.

<h2>Charting the course forward</h2>

On top of the apartment developments underway and planned in Perth and Melbourne, Cedar Woods has a multi-stage apartment development in Brisbane’s Woolloowin, and several years remaining on their masterplanned communities in Williams Landing in Melbourne and Glenside in Adelaide, both of which offer a mix of apartments and townhouses.

Blackburne says the developer has been able to mitigate some of the macro risks currently at play in the new development space, particularly in the construction sector.

“Cedar Woods has been able to make many apartment projects work because of good buying of the raw land in the first place, as well as its strong pipeline of apartment projects, enabling the company to attract builders to build deep, multi-year relationships.”&nbsp;

For Cedar Woods, 2026 is set to be significant, with anticipated approvals and submissions laying the groundwork for fresh apartment supply and multiple launches in 2027.

&nbsp;

Joel Robinson

Cedar Woods ramps up apartment development amid Australia’s deepening housing shortfall

Rockdale has long been characterized as a suburb on the cusp. Well-located, well-connected, but historically underserved by modern apartment offerings.

It has everything going for it: outstanding connectivity to the Sydney CBD, just four train stops to Central Station, strong local amenity anchored by Roc​kdale Plaza and a growing main-street dining scene, and enviable proximity to Brighton-Le-Sands. The six-kilometre beachfront is lined with bayside restaurants, cafés, and walking paths, giving residents a lifestyle typically associated with much more expensive coastal suburbs.

What Rock​dale has lacked is high-quality contemporary apartments. Most existing developments date back several decades, with floorplans that no longer support modern living needs, and buildings constructed long before today’s standards in engineering, efficiency, and sustainability.

Lender, fund manager and apartment developer Princeton identified the gap early. Seeing all the right ingredients in Rockd​ale, transport, lifestyle, retail, and affordability, they set out to deliver what the suburb was missing. Their answer is <a href="https://www.apartments.com.au/new-apartments/marque-rockdale-602-608-princes-highway-rockdale-nsw-2216">Marque Rockdale</a>, a collection of 58 one-, two-, and three-bedroom apartments now nearing completion just a short walk from Ro​ckdale Plaza, home to over 50 specialist retailers and anchored by&nbsp;Woolworths, Big W and Aldi.

[smartcode_project:default project_id=136442 project_image_fid=355216]

Understanding they would be resetting the benchmark for the area, Princeton focused on ensuring buyers received best-in-class quality, longevity, and protection.

A major step was securing the sought-after Latent Defects Insurance policy from Resilience Insurance. This policy protects apartment buyers from structural or waterproofing defects for the first 10 years of the building’s lifecycle. Crucially, it is first-response insurance, meaning that if an issue arises, the insurer pays immediately for remediation—rather than waiting for lengthy investigations to determine fault before work can begin. For purchasers, it offers an unprecedented layer of security rarely seen in Sydney apartment projects.

During construction, independent building inspection firm SDSS has been providing Technical Inspection Services, bringing highly specialised construction experts on-site at key stages to ensure workmanship meets the highest standards. The project is being built by Coplex, an iCIRT-rated construction company, and throughout the build SDSS has frequently referred to <a href="https://www.apartments.com.au/new-apartments/marque-rockdale-602-608-princes-highway-rockdale-nsw-2216">Marque Rockdale</a> as one of the best projects currently on their books.

Princeton also doubled down on comfort, acoustics, and livability.&nbsp;As well as being the only building along Princes Highway with a landscaped buffer between the building and the road, Princeton has purposefully included double-glazed windows in all apartments to reduce noise.

Apartments feature double-glazed, noise-reducing windows and ducted air conditioning in every residence.&nbsp;In addition to the project’s transport convenience, Princeton has partnered with GoGet Car Share to provide a dedicated GoGet vehicle housed permanently within the building. Residents will receive a free annual GoGet membership, paying only usage fees, offering a flexible alternative to owning a second car and enhancing the project’s sustainability credentials.

[smartcode_project:default project_id=136442 project_image_fid=277075]

Residents will enjoy an exclusive rooftop oasis, purpose-designed as an extension of their living space. The communal rooftop includes BBQ facilities and outdoor entertaining areas, a&nbsp;pergola-shaded dining zone, a dedicated children’s play space, and a landscaped herb garden.

Princeton and Coplex is approaching completion of <a href="https://www.apartments.com.au/new-apartments/marque-rockdale-602-608-princes-highway-rockdale-nsw-2216">Marque Rockdale</a>, and are expecting residents to move in early in the new year. The mix of apartment configurations and price points have been a hit with young professionals, those who need to commute to the CBD, and families who appreciate doorstep amenity.

“Marque is a place where residents will be proud to call it home," Princeton Head of Development George Young says.

"We’ve worked really hard with Coplex and our design team to deliver an incredible building for the future home owners to make their own. The homes are all designed to allow the residents to make it their own, a place to belong and live a stylish urban life."

[smartcode_project_cta:default project_id=136442]

Marque Rockdale sets a new standard of apartment living in Sydney's south

Plans to revitalize the&nbsp;long-established Benowa Gardens Shopping Centre into a mixed-use community combining living, shopping, dining, health and wellbeing facilities, have been proposed to the Gold Coast City Council.

The Benowa Gardens Urban Village proposal by Benowa Gardens Holdings seeks to transform the 17,660 sqm site at <a href="https://www.apartments.com.au/new-apartments/203-ashmore-road-benowa-qld-4217">203 Ashmore Road</a> into a contemporary, sustainable destination that reflects global trends in modern community design while retaining the familiar local character residents value.

The site is bordered by Ashmore and Benowa Roads and Carrara, with ready access to Pindara private hospital, four schools, TAFE, sports fields and the nearby Botanic Gardens.

Benowa Gardens Holdings is seeking a preliminary Council approval only for its proposed masterplan and variations to the site’s Neighbourhood Centre zoning.&nbsp; 
Formal Public Exhibition commenced Friday and also marks the start of comprehensive community consultation with surroundings residents, schools, P&amp;Cs, existing retailers, nearby sporting clubs, arts groups and Botanic Gardens volunteers.

Designed by Neylan Architecture, the masterplan envisions around 413 new apartments, complemented by upgraded retail, dining, and wellness amenities as part of 10,000 sqm of retail, and 9,630 sqm of office space/medical suites.

The development will feature green open spaces, shaded promenades, landscaped terraces, pedestrian walkways, and expanded healthcare and lifestyle services in synergy with the neighbouring Pindara Private Hospital and local schools.

<img alt="Benowa" data-entity-type="file" data-entity-uuid="244f4d54-2e67-4141-92b8-78d5735f47c2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-11-26%20at%2012.47.34%E2%80%AFPM.png?VersionId=FmF5lzhpwVZc7POsdB770TJ_Bf2c0od8" />

“This concept embraces the way people increasingly want to live - safely, conveniently, and within strong local communities,” said Patrick Lu, Director of Benowa Gardens Holding.

“Benowa Gardens will set a new benchmark for integrated living on the Gold Coast. It’s a thoughtful, community-minded evolution that brings global best practice in urban design to one of the city’s most established areas.”

Lu said this isn’t just a redevelopment, it’s a renewal with purpose.

“Benowa Gardens has served the community for decades. Our goal is to ensure it continues to do so for generations to come, as a lively, connected Urban Village where people can truly live, work and thrive. We’re already talking to school leaders and the community to seek their feedback on our proposal, and have taken on board their ideas to improve student safety with additional “traffic calming” measures on Carrara Street. We’re conducting meaningful and sincere consultations and want to play our role in preserving and enhancing the local community."

The proposed redevelopment aims to deliver tangible benefits across the Benowa and wider Gold Coast community, including:

<ul>
	<li>Improvement of retail amenity, to capture the under-served local market demand and keep the local business at their local shopping centre.</li>
	<li>Housing diversity; offering a range of apartment types for key workers, downsizers, and local families who wish to remain in the area.</li>
	<li>Enhanced shopping and dining; revitalised retail spaces designed to support local businesses and attract more visitors.</li>
	<li>Health and wellbeing access; additional medical and wellness amenities to complement existing local facilities.</li>
	<li>Improved traffic flow and access; two new access points, upgraded intersections, upgrade pedestrian pathway’s signal and proposed upgrade of pedestrian and cycle connections/space to improve safety and convenience, especially for school children.</li>
	<li>Environmental sustainability; energy-efficient design, green rooftops, and water-sensitive landscaping to reduce emissions and enhance comfort.</li>
	<li>Local jobs and investment; supporting hundreds of construction and long-term roles while stimulating local economic growth.</li>
</ul>

The group behind the project boasts extensive experience in the property development industry, both in Australia and international markets. Over the past 23 years, the group has been involved in the development and management of a diverse portfolio of assets including residential dwellings, shopping centres, bulky-goods stores, community and medical facilities, childcare centres, offices, hotels, and taverns, across Brisbane, Ipswich, and the Gold Coast.

Benowa Gardens to become new mixed-use urban village

Demand for townhouses in Melbourne’s inner west has surged as buyers seek the elusive combination of space, affordability, and location.&nbsp;

With family-first apartments increasingly rare and standalone homes often out of reach, townhouses have emerged as the new sweet spot, delivering generous living areas with lower maintenance needs within close proximity to the Melbourne CBD.&nbsp;

<a href="https://www.apartments.com.au/new-townhouses/kings-lane-south-kingsville-50-58-new-street-south-kingsville-vic-3015">Kings Lane</a>, the new under-construction townhouse development by the family-owned developer&nbsp;<a href="https://www.apartments.com.au/developers/blue-run">Blue Run</a>&nbsp;in South Kingsville, responds directly to this trend. Comprising just 25 residences designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, the project offers a compelling alternative to both apartment downsizers and family upsizers. With three-bedroom homes priced under $1 million, it presents one of the area’s rare attainable pathways to townhouse living less than eight kilometres from the CBD.

[smartcode_project:default project_id=145042 project_image_fid=355147]

<a href="https://www.apartments.com.au/developments/south-kingsville-vic-3015">South Kingsville</a> itself is quietly becoming one of Melbourne’s most dynamic pockets of urban renewal. Flanked by the established appeal of Yarraville, Newport and Williamstown, the suburb balances quiet, village-like streetscapes with major infrastructure upgrades and a growing slate of retail, dining and lifestyle amenity.&nbsp;

Kings Lane occupies a well-connected site at 50–58 New Street, just off Blackshaws Road and within walking distance of the emerging Union Quarter precinct, a major retail destination anchored by Woolworths, specialty food outlets and wellness services.

A 400-metre stroll brings residents to the Vernon Street shops, a local favourite known for its mix of independent grocers, cafes and family-run eateries. For broader shopping options, Altona Gate Shopping Centre and Yarraville Square are both within a short drive. Spotswood IGA and the Williamstown retail strip further broaden the convenience of daily essentials.

[smartcode_project:default project_id=145042 project_image_fid=355139]

Dining options in the area lean toward eclectic and community-driven, with standouts like Rocco’s Deli, Dad and Dave’s, and Pizza d’ASPORTO offering a range of casual and elevated menus. Cafés such as Hudson Road Wine &amp; Beer and Blacksheep Coffee add to the lively yet local feel of the neighbourhood.

Green space is another hallmark of life at Kings Lane. Edwards Reserve is close enough for morning walks or casual sport, while larger parks like Newport Lakes, Yarraville Gardens, and Cruickshank Park are all a few minutes’ drive away. More than half of the nine-hectares of new green space or parkland being created as part of the West Gate tunnel works is located just at the end of New Street, the same street as Kings Lane.

&nbsp;

For those with school-age children, South Kingsville is home to a range of quality childcare centres and schools, including Kingsville Primary, Spotswood Primary, and Williamstown North Primary. Community Children’s childcare and South Kingsville Preschool are nearby, making the suburb particularly attractive to young families.

Transport links continue to improve, with Spotswood Station and the West Gate Freeway both within a five-minute radius. Future upgrades, including the proposed sky rail for Newport and Spotswood, and the delivery of the West Gate Tunnel project, promise even better access to the CBD and Melbourne Airport in the years to come.

Kings Lane's 25 all-electric townhouses are currently under construction, and will complete in late 2026.

[smartcode_project_cta:default project_id=145042]

Staff Writer

Kings Lane townhouses offers rare value in Melbourne's thriving inner west

Developer-builder <a href="https://www.apartments.com.au/developers/billbergia">Billbergia</a> has set a new apartment price record for <a href="https://www.apartments.com.au/developments/rhodes-nsw-2138">Rhodes</a>, a suburb the company has been instrumental in transforming over the past two decades.

The milestone follows the delivery of thousands of apartments across the harbourside peninsula, culminating in the $4.5 million sale of a 220 sqm penthouse in the <a href="https://www.apartments.com.au/buildings/rhodes-central-oasis-39-marquet-street-rhodes-nsw-2138">Rhodes Central Oasis</a> building, which Billbergia completed earlier this year. It is the first apartment in Rhodes to surpass not only the $4 million mark for settled sales, but also the $3 million mark, eclipsing the previous $2.75 million record set in 2021.

The purchaser had originally secured several apartments in the 40-storey tower off the plan as investments. During settlement, she spent more time in the Rhodes area and was so impressed with the building that she decided to downsize from her Northbridge home into the four-bedroom plus MPR penthouse.

The sale underscores the long-term work Billbergia has undertaken in Rhodes since the early 2000s. The company, rated 4.5 Gold Stars under the NSW iCIRT system, identifying it as one of the state’s most trustworthy and financially secure developers, was a pioneer of the area’s urban renewal. What was once a heavily industrial waterfront has become one of Sydney’s most successful examples of transit-oriented development.

<img alt="Billbergia" data-entity-type="file" data-entity-uuid="56093d7f-db18-42f4-bf9b-115bdf76f5f3" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-11-26%20at%2011.10.06%E2%80%AFAM.png?VersionId=pca77Mr.H83nwXbJexmaLUAqBewtQ7d9" />

Billbergia is now driving the peninsula’s next major evolution: the most ambitious project in its nearly four-decade history. They are planning the Rhodes Bay Masterplan, an eight-tower, mixed-use precinct on Leeds Street. Currently with the NSW Government’s Housing Delivery Authority which is now championing large-scale projects across the state, the Rhodes Bay Masterplan lays the groundwork for a generational reshaping of this important pocket of Sydney’s Inner West.

The masterplan spans more than 31,000 sqm of amalgamated industrial land along the foreshore, land that has been privately held and inaccessible to the community for more than a century. According to Billbergia’s Development Director, Saul Moran, reclaiming this land for public use is central to the company’s vision. 
 
“What’s so exciting is that we have over 300 metres of privately-held industrialised waterfront, land that’s been locked away for more than 100 years, which we’re bringing back to the community,” he says. “It’s taken many years to assemble sites like these, and the goal now is to transform them into meaningful public space where new homes can be built in an integrated, amenity-rich setting.”

At full completion, the Rhodes Bay Masterplan is expected to deliver over 2000 apartments, with the first 1000 to be completed by 2029. Billbergia’s design focused on nine slender towers, so they could give back more to the ground plane. There will be more than 16,000sq m of new parkland and recreation space, including sports fields, a foreshore play area and waterfront green links. Around 14,600 sqm of retail is also proposed, extending the precinct’s role as a true mixed-use hub.

<img alt="Rhodes Bay" data-entity-type="file" data-entity-uuid="240ffc41-4f26-421a-9606-5c56f6fc2d93" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-11-26%20at%2011.05.48%E2%80%AFAM.png?VersionId=BkBxZr7S8CAt1vgNa8AF3zjdc3YuVh0L" />

“Density only works when it’s paired with amenity, transport and open space, and that’s what’s made Rhodes such an amazing success story,” Moran says, adding that the demographic shift Billbergia has seen over the last two decades has informed their future development pipeline in the suburb.

“Rhodes has moved from being largely an investor market to a strong owner-occupier community,” Moran says. “There’s real demand for three-bedroom homes, flexible intergenerational layouts, and apartments people can grow into.”

&nbsp;“We’re designing taller, more slender towers to free up the ground level for sport, recreation and green space. High-density communities thrive when people have the best backyards in Australia, and that’s what we want to create here.”

Demand remains robust, evidenced by Billbergia’s recent results. “We achieved a record sale across the entirety of Rhodes Central just last week,” Moran says. “It shows the depth of confidence buyers have in what’s being built here.”

Billbergia’s vertically integrated model allows them to overcome the recent cost escalation and challenges in the build environment. “Having an in-house construction team lets us control feasibility, value management and quality from day one,” Moran says. “It’s critical in the current market, where construction escalation is at the forefront of every project’s viability.”

The company is also leveraging the NSW Government’s new Housing Delivery Authority process, which Moran describes as a more efficient pathway without compromising design standards. 
 
“We’re really applauding the NSW Government for its efforts to increase housing supply. There’s been a remarkable improvement in how they’re helping deliver more homes, more quickly.”

Billbergia has already commenced construction of Stage One of the Rhodes Bay masterplan. They will be lodging the State Significant Development Application before Christmas.

“We’re moving quickly, but with due care,” Moran says. “This is a generational precinct, and it needs to be done right.”

Billbergia smashes suburb record as Rhodes transformation continues

Income Equality

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GUEST OBSERVATION
Outgoing secretary of the Prime Minister’s Department Martin Parkinson has condemned “entrenched disadvantage” in Australia, in his valedictory address on leaving the public service.
Parkinson also warned it was imperative that Australia did not allow “the kind of retreat from openness and vilification of differences” that had happened in some other countries.
During his long career Parkinson headed the climate change department (now defunct) and treasury (from which he was sacked by Tony Abbott), as well as the prime minister’s department, where he will now be succeeded by Phil Gaetjens, formerly Scott Morrison’s chief of staff and most recently head of treasury.
In his Monday address Parkinson said Australia had not had “the rising income inequality at the top end” of the United States and much of western Europe, “although wealth has become more unequally distributed off the back of rising house prices”.
But this was a “low bar”, he said.
“Our history has bequeathed a degree of entrenched disadvantage that should be seen as a disgrace in any country, but particularly one as developed as Australia,” he said.
More than half of those in the bottom decile in 2000 were still in the lowest 20% 15 years later, he said.
Ideally, people should only be at the bottom of the income distribution spectrum temporarily due to life events, not whole families and communities sentenced to it for generations.
If you want a single thing to blame for the disadvantage we see in Australia, particularly in our remote areas, look no further than an understandable lack of hope. With those kind of odds, anything else would be irrational.
A key to evening people’s chances was to have the best education system that could be achieved and a culture valuing learning, Parkinson said.
He said Australia would need to use all its advantages to sustain its prosperity and security in the future. These included its multicultural society, a merit-based culture and a market-based approach.
There are really only two choices for this country. We can take pride in our diversity and use it as an advantage when interacting with the world, or we can hunker down behind borders and slowly gnaw at each other.
Parkinson said that “to their credit, our parliamentary leaders have maintained a remarkable commitment to an open economy and social cohesion, despite immense pressures the other way”.
On the international front, Parkinson said many regional and global institutions, including the International Monetary Fund and the World Bank, the G20 and APEC, were struggling.
It’s particularly hard for the WTO to enforce trade rules when the largest countries are openly flouting them.
The United States largely built this order in its own image, under-writing it with security guarantees. We benefit immensely from this order and must help support it wherever we can.
Parkinson reflected on his disappointment at his dismissal as treasury secretary. “I received the ‘wooden spoon’ as head of the treasury in 2013 – a job I enjoyed and in which I aspired to follow the nation-building work done by predecessors such as Chris Higgins, Ted Evans and Ken Henry.
"It was a drawn out departure, and I couldn’t even look forward to sitting on the couch to watch a care free game on the weekend as the Essendon Bombers also had a terrible season.”The Conversation

<a href="https://theconversation.com/profiles/michelle-grattan-20316" target="_blank">Michelle Grattan</a>, Professorial Fellow, <a href="http://theconversation.com/institutions/university-of-canberra-865" target="_blank">University of Canberra</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/martin-parkinson-declares-entrenched-disadvantage-in-australia-a-disgrace-122410" target="_blank">original article</a>.
</body></html>

j.ballantyne1990-6AQqhLzZaK

Martin Parkinson declares 'entrenched disadvantage' in Australia a disgrace: Michelle Grattan

<html><body>
GUEST OBSERVATION
Open and shut. Most Australians would be worse off over their lifetimes if compulsory super contributions were lifted.   
Compulsory superannuation was <a href="http://www.keating.org.au/shop/item/the-story-of-modern-superannuation-31-october-2007" target="_blank">sold</a> to Australians on the basis that it would make us better off.
But as the government prepares for an <a href="https://www.afr.com/news/policy/tax/retirement-incomes-face-review-20190524-p51qsi" target="_blank">independent inquiry</a> into retirement incomes, <a href="https://blog.grattan.edu.au/" target="_blank">new Grattan Institute research</a> finds that increasing compulsory contributions from 9.5% of wages to 12%, as has been legislated, would leave many Australian workers poorer over their entire lifetimes.
They would sacrifice a significantly increased share of their lifetime wage in exchange for little or no increase in their retirement income.
The typical worker would lose about A$30,000 over her or his lifetime.
More compulsory super means lower wages
Superannuation delivers higher incomes in retirement at the expense of lower incomes while working.
Yet the superannuation lobby usually presents <a href="https://www.afr.com/personal-finance/superannuation-and-smsfs/australians-don-t-want-a-dickensian-retirement-20190530-p51sq5" target="_blank">only one side of the pact</a>, urging an increase in compulsory super to get the higher retirement incomes while ignoring the income that workers have to forgo to get them.
Compulsory super contributions are paid by employers. But <a href="https://blog.grattan.edu.au/2019/04/do-superannuation-increases-come-out-of-workers-wages/" target="_blank">they appear</a> to come out of funds the employers would otherwise have spent on wages.
This means increases in compulsory super come at the expense of wage increases – something that was acknowledged when compulsory super was set up (indeed, it was <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/radionational/programs/saturdayextra/unfair-super/3231046">part of the reason it was set up</a>) and has been <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/radionational/programs/saturdayextra/unfair-super/3231046">acknowledged</a> by advocates of higher contributions, including the former opposition leader Bill Shorten).
Grattan Institute calculations suggest that lifting compulsory super to 12% by 2025 will take up to <a href="https://theconversation.com/20-billion-per-year-thats-how-much-higher-superannuation-could-take-from-wages-116353" target="_blank">A$20 billion a year</a> from workers’ pockets. For most, the trade-off isn’t worth it.
The reality is that most Australians can already look forward to a <a href="https://theconversation.com/why-we-should-worry-less-about-retirement-and-leave-super-at-9-5-106237" target="_blank">better living standard in retirement</a> than they had while working – even if they <a href="https://insidestory.org.au/the-reassuring-truth-about-retirement-incomes/" target="_blank">interrupt their careers</a> to care for children. Workers with interrupted employment histories lose super in retirement, but get larger part-pensions.
The poorest Australians get a clear pay rise when they retire: the age pension is worth more than their after-tax income while working.
Other Grattan Institute research finds retirees are <a href="https://grattan.edu.au/report/money-in-retirement/" target="_blank">more comfortable financially</a> than any other group of Australians and are much less likely to suffer financial stress than working-age Australians.
It needn’t lead to better retirement
So what about Middle Australia?
Despite the “<a href="https://www.smh.com.au/money/investing/save-early-and-often-to-harness-the-power-of-compound-interest-20180201-h0rvwq" target="_blank">magic</a>” of compound returns, just about all of the extra income from a higher super balance at retirement would be offset by lower pension payments, due to the pension assets test.
It is always possible the pension rules will change, but it isn’t usually regarded as wise to assess proposals on the basis of changes that haven’t happened and aren’t being suggested.
Pension payments themselves would also be lower under a 12% superannuation regime. They are <a href="https://www.dss.gov.au/our-responsibilities/seniors/benefits-payments/pension-rates" target="_blank">benchmarked to wages</a>, which would be lower if employers have to put more into super.
The graph below shows that the big winners from higher compulsory super would be the wealthiest 20% of Australian earners, who would benefit from extra super tax breaks and would be unlikely to receive the age pension anyway.
Higher compulsory super redistributes income from the middle to the top. Middle earners would be no better off.
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<a href="https://images.theconversation.com/files/283240/original/file-20190709-44472-ai5pg0.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/283240/original/file-20190709-44472-ai5pg0.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Over a lifetime, it could be a net loss
As higher compulsory super would leave Middle Australians no better off in retirement, but poorer while working, it follows that it would make them poorer over their entire lives.
How much poorer? We calculate that, after adjusting for inflation, the typical (median) 30-year-old Australian worker earning A$58,000 today would lose about 2.5% of wages each year and get less than a 1% boost to retirement income.
As a result, that person’s lifetime income would be almost 1% lower – about A$30,000 lower.
A post published on the <a href="https://blog.grattan.edu.au/?p=901&amp;preview=true" target="_blank">Grattan Blog</a> today gives more detail on the method we used to calculate the impact of higher compulsory super on lifetime incomes.
<a href="https://images.theconversation.com/files/283187/original/file-20190709-51273-1u9ttt7.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/283187/original/file-20190709-51273-1u9ttt7.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
And it would cost the budget
Higher compulsory super might be justified if it saved the budget money on the pension – because those savings could be used to compensate middle-income earners via lower taxes or more services.
But in fact, higher super would cost the budget.
Our modelling shows that lifting compulsory super to 12% of wages would cost taxpayers an extra <a href="https://grattan.edu.au/report/money-in-retirement/" target="_blank">A$2 billion to A$2.5 billion</a> per year in super tax breaks, <a href="https://grattan.edu.au/report/super-tax-targeting/" target="_blank">overwhelmingly</a> directed at high-income earners.
Those extra super tax breaks would <a href="https://treasury.gov.au/sites/default/files/2019-03/super_charter_report.pdf" target="_blank">dwarf</a> any budget savings on the age pension until about 2060 – by which time there would be 80 years of budget costs from compulsory super to pay back before the whole exercise saved the government money.
Here’s the bottom line, worth keeping in mind in the lead-up to the independent inquiry: it’s hard to think of a policy less in the interests of working Australians than more compulsory super.<img src="https://counter.theconversation.com/content/120002/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Brendan Coates, Program Director, Household Finances, Grattan Institute
Owain Emslie, Associate, Grattan Institute
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/super-shock-more-compulsory-super-would-make-middle-australia-poorer-not-richer-120002" target="_blank">original article</a>.
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More compulsory super would make middle Australia poorer, not richer: Grattan Institute

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With affordable houses <a href="https://theconversation.com/get-used-to-your-commute-data-confirms-houses-near-jobs-are-too-expensive-77867" target="_blank" style="font-size: 12.16px;">increasingly out of reach</a>, <a href="https://theconversation.com/factcheck-is-wage-growth-at-record-lows-66552" target="_blank" style="font-size: 12.16px;">wage growth slow</a> and <a href="https://thenewdaily.com.au/money/finance-news/2017/07/03/australia-debt-new-records/" target="_blank" style="font-size: 12.16px;">household debt high</a>, Australians are certainly feeling poor. But how do they compare to their neighbours? New Census data confirms there’s a lot of variability in income.
The Census breaks the country up into 349 geographic regions (named in quote marks below), some of which cover more than one major town and some of which group related suburbs within cities. We examined 331 of these regions, excluding those containing fewer than 1,000 households.
The data show there are high levels of income inequality within these regions. A simple way to measure this is to look at the ratio of income between those who are well off (the top 20% within a region) and of those who are relatively disadvantaged (the bottom 20%) in the Census data. In Australia the weekly household income for the top 20% (A$1,579 per week) is 3.5 times the income of the bottom 20% (A$457).
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The “Melbourne City” region has the most unequal incomes in Australia, where the top 20% have an income that is 8.3 times as high as those in the bottom 20%. “Adelaide City” (ratio of 5.5) and the “Sydney Inner City” (4.8) also have quite high levels of inequality.
Two of the poorest regions in the Northern Territory also have very high inequality. These are the vast region that encircles Darwin, called “Daly, Tiwi, West Arnhem” (ratio of 5.2) and the “East Arnhem” region (5.3).
However, there are regions with varying income levels, that also had relatively low inequality ratios. The region of “Molonglo”, in South Canberra (ratio of 2.2), “West Pilbara” in Western Australia (2.4) and “Kempsey, Nambucca” on New South Wales’ north coast (2.5) all have low levels of inequality.
For our analysis, we used equivalised household income. Equivalisation is a technique in which members of a household receive different weightings, based on the amount of additional resources they need.
The Australian Bureau of Statistics assumes that the first adult in a household has a weighting of 1, each additional adult a weighting of 0.5, and each child a weighting of 0.3. Total household income is then divided by the sum of the weightings for a representative income.
<h2>Incomes across Australia</h2>
For the whole of Australia, the equivalised median household income (the income in the middle of the distribution) is A$878 per week. The region with the lowest median income was “Daly, Tiwi, West Arnhem” in the Northern Territory, at A$510 per week.
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However, several regional areas like “Maryborough, Pyrenees” (northwest of Ballarat in Victoria), “Kempsey, Nambucca” (NSW), “Maryborough” (between Bundaberg and the Sunshine Coast in Queensland), “Inverell, Tenterfield” (in NSW’s Northern Tablelands) and “South East Coast” in Tasmania all had median incomes of A$575 per week or less.
At the other end of the distribution, households in leafy suburbs of North Sydney – “Mosman” (NSW) had a median income of A$1,767 per week. Areas like “South Canberra” (ACT), “Manly” (in Sydney’s east) and the mining-dominated “West Pilbara” (WA) all had median incomes of A$1,674 or more per week.
We also looked at the extremes of the distribution. We define high income as those households with an income of A$1,500 or more per week. This equates to about 22% of the population. We defined low-income households as having an income of less than A$400 per week (about 14% of households).
Around 40% of households in the “Daly, Tiwi, West Arnhem” region were classified as being in poverty compared to around 6% in “North Sydney, Mosman” region. Conversely, around 60% of households in this region were classified as having high income, compared with only 6% of households in “Kempsey, Nambucca”.
<h2>How segregated are we within regions and cities?</h2>
While government policy is often delivered at the regional level, people live their lives at the local or neighbourhood level. However, the relatively disadvantaged and the upper-middle class are often segregated within these regions.
<a href="https://www.brookings.edu/book/dream-hoarders/" target="_blank">Richard Reeves of the Brookings Institute argues</a> the segregation of the upper-middle class in Australia means this group “hoards” the benefits in the region they live in. Among the location advantages he lists are: access to the best schools, opportunities to network with the wealthy and powerful and the ability to disproportionately accrue capital gains on housing assets. To avoid this kind of “opportunity hoarding”, the rich and poor would need to be evenly spread within a region.
A simple way to look at this is through a “dissimilarity index”. In essence, this measures the evenness with which two groups are spread across a larger area. It ranges from zero to one, with higher values indicating a more uneven distribution and zero indicating complete mixing.
Looking at the distribution of the high income. Across Australia, the dissimilarity index has a value of 0.27. This means that around 27% of high-income households would have to move neighbourhoods to make the distribution completely even.
This varies quite substantially by region. “Far North” (encompassing Cape York in QLD) has a dissimilarity index of 0.42. “Auburn” (in western suburbs of Sydney, NSW) and “Playford” (on Adelaide’s northern fringe) also have quite large values.
Our richest regions tend to have the most even distribution of the wealthy, with “North Sydney, Mosman”, “Molonglo” and “Manly” having values of 0.06 or less.
“East Arnhem” has a very high level of concentration of low income individuals by neighbourhood, with a dissimilarity index of 0.70. The next two highest regions (“Katherine” and “Alice Springs”) are also in the Northern Territory, with index values of 0.53 and 0.55 respectively.
We can also compare the measures we used, to find out how they relate to each other. The following figure shows that the richest regions tend to be those with the highest level of income inequality.
However, as inequality goes up, there tends to be a greater concentration of low income households by neighbourhood (there’s also less of a concentration of high income households).
<h2>Have and have nots</h2>
It’s true that the level of income mobility is <a href="https://www.cese.nsw.gov.au/publications-filter/income-mobility-in-australia" target="_blank">higher in Australia</a> than it is in the US. However, Australia also has prominent examples of economic policies that disproportionately benefit the upper-middle class, such as the capital gains tax discount and superannuation tax incentives.
Australia also has a geographically concentrated income distribution, with the rich living in neighbourhoods with other rich people. The poor are also more likely to live in close proximity to people who share their disadvantage.
If Richard Reeves is right, and the spatial segregation of high and low income households reinforces inequality across the generations, then policies that encourage the mixing of different social classes in the same neighbourhood and region should be a way forward.
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This article was put together with research assistance from Hubert Wu, Australian National University and Harvard University.
<a href="https://theconversation.com/profiles/nicholas-biddle-10171" target="_blank">Nicholas Biddle</a>, Associate Professor, ANU College of Arts and Social Sciences, <a href="https://theconversation.com/institutions/australian-national-university-877" target="_blank">Australian National University</a> and <a href="https://theconversation.com/profiles/francis-markham-14836" target="_blank">Francis Markham</a>, Research Fellow, College of Arts and Social Sciences, <a href="https://theconversation.com/institutions/australian-national-university-877" target="_blank">Australian National University</a>
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/what-income-inequality-looks-like-across-australia-80069" target="_blank">original article</a>.
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