Insights from the Economic Roundtable: Housing, Environment, and AI

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The federal government’s economic roundtable has finished, after three days of talks at Parliament House involving economists, employers, business groups, unions and civil society representatives.

The discussions were aimed at lifting living standards, primarily by boosting productivity, which has stagnated in Australia and other Western countries.

Sectors represented included banking, universities, mining and superannuation, and topics discussed included artificial intelligence and building and construction. Here are some of the key takeaways.

A ‘constructive’ mood and an address from the prime minister

While the discussions held around the table themselves were shrouded in secrecy — with attendees not even allowed to bring mobile phones into the cabinet room — Tuesday was a “promising and productive first day”, according to Treasurer Jim Chalmers.

Prime Minister Anthony Albanese promised to strive for consensus to achieve long-lasting change during his opening address.

“Political change, whether it’s in the economy, social policy or the environment, is likely to be more successful and more entrenched and more lasting when people come with us on that journey,” Albanese said.

Among the topics discussed on the opening day was developing the skillset of Australia’s workforce. Participants recognised businesses needed to play a role in training their workers, but there was division on how to incentivise employers to do this.

Business Council of Australia chief executive Bran Black said unions had proposed charging employers a levy to provide skills, but businesses preferred an incentive for employers to bring on more apprentices.

‘Win-wins’ over cutting red tape on housing, environment

Simplifying the regulation of housing approvals garnered widespread support on day two of the roundtable on Wednesday.

The treasurer promised “win-wins” over cutting red tape, with businesses and unions seemingly on the same page on the issue.

Housing Minister Clare O’Neil garnered broad support for a proposed pause to the National Construction Code for the life of the housing accord, which runs until mid-2029 and sets a target for 1.2 million new homes. A pause is largely aimed a speeding up construction times.

Changes to the code that deal with safety issues, such as fireproofing, would be exempt from a pause. But a broader rewrite was also possible.

Master Builders Australia has been pushing for a review into “non-essential” changes, including EV charging requirements, which they argue increase the cost and complexity of building new homes.

Australian Council of Trade Unions (ACTU) president Michele O’Neil said it was important to keep improving the energy efficiency of new homes, but acknowledged the nearly 3,000-page document was “clunky”, and called for more support for modular housing.

Not all were on board with the pause. Australian Council of Social Service chief executive Cassandra Goldie was concerned about it leading to poorer housing quality.

There was also support for reforming the Howard-era Environment Protection and Biodiversity Conservation Act.

Unions, employer groups and environmentalists all said the act was no longer fit for purpose and pressed for a new act that provides faster decisions for projects from mining to housing.

Australian Conservation Foundation chief executive Kelly O’Shanassy said there was consensus on the government’s commitment to create a national environment protection agency (EPA), but the “devil is in the detail”.

While business groups want the EPA to only deal with compliance and not project approvals, O’Shanassy said Australia needs an independent regulator that is held to account for the speed and quality of its decisions.

A woman in a white suit sitting next to a man in a grey suit

Independent MP Allegra Spender (left) said there was agreement around the need to train workers to adapt to the changing economy. Source: AAP / Mick Tsikas

Breakthrough model for artificial intelligence

Australia’s tech sector and unions will work together on a model that pays creatives for content used to train artificial intelligence.

ACTU secretary Sally McManus said the peak union body reached a breakthrough with Tech Council chairman Scott Farquhar at the roundtable late on Wednesday.

“There’s agreement that we’re going to give this a real good go at coming up with a model that makes sure that people are actually paid for what they produce. So that’s a big thing,” McManus told reporters on the sidelines of the summit in Parliament House on Thursday.

Conversations around technology and artificial intelligence featured in the talks from day one, with independent MP Allegra Spender saying there was agreement around the need to train workers to adapt to the changing economy, including in using AI.

Regulation of AI was a major dividing line between employers and unions heading into the roundtable, with the ACTU calling for the government to force employers to consult with staff before introducing AI tools to the workplace.

The Finance Sector Union has also called for a “just digital transition” to protect white collar workers from being replaced by AI.

The union claimed victory on Thursday after Commonwealth Bank backflipped on a decision to make 45 call centre jobs redundant due to the introduction of a new AI-powered voice bot which the bank claimed would cut call volumes.

Tax and intergenerational inequality

The final day of the summit on Thursday focused on tax reform and budget sustainability.

The government went into the federal election in May promising not to make changes to negative gearing and the capital gains benefit, but forum attendees argued for reforms.

Dale Boccabella, an associate professor of tax law at the University of New South Wales, said capital gains and negative gearing reform needed to be considered by the government to take to voters.

“Aspects of the tax system is just unfair and the big one is the capital gains tax discount,” he said.

“If you look at who gets the benefits, it goes to the top end, they don’t need a 50 per cent tax break.”

Boccabella said sustainability of the tax system needed to be front and centre during the final day of the roundtable.

“Sustainability and fairness go hand in hand, and underlying that, of course, is generational unfairness,” he said.

At the conclusion of the roundtable, Chalmers said the attendees took their “inter-generational responsibilities” seriously and that the talks gave Australia a “much better chance” of confronting challenges.

A brief clash

While Chalmers said there had mostly been goodwill and congeniality between participants of the roundtable, there was a clash between the Treasurer and Opposition treasury spokesperson Ted O’Brien on Thursday.

During a session on efficient government spending, O’Brien accused the government of lacking fiscal restraint. “I set a test for the treasurer today to stop the spending spree, which starts with the introduction of quantifiable fiscal rules,” the lone Opposition representative said during a break.

O’Brien called for the government to put a roof on public spending, set time-bound targets to reduce red tape and conduct a total system cost analysis of the energy system.