Further to the proposal today by the Liberal Party to loosen the lending standards for people borrowing for a home. This is long time wish of Liberal Senator Andrew Bragg. He was pushing it last year and held Senate committee hearings on the issue looking for people to come out in support of it. Banks love it because it allows them to lend more and make more money. The restrictions were made tougher after the GFC to make sure that… well another GFC does not happen!

Matt Grudnoff and I appeared before the committee rather to his disappointment, not in support of it.

I pointed out that the housing market is already massively distorted by benefits to investors through the 50% capital gains tax discount and negative gearing and relaxing the lending buffers to homeowners was just introducing another distortion.

I suggested it was akin to introducing cane toads to get rid of another introduced species.

“I’d also add that you need to think of why we would even seek to reduce the buffer for first home buyers. Clearly, from your point of view, it is actually to enable first home buyers to get into the market and to be able to actually buy a home and to borrow higher. What is the reason that they need to do that? It is because of the distortions that are in place in the taxation system through the capital gains tax discount and negative gearing. Our argument is: let’s get rid of those distortions rather than bringing in another distortion to try and counter that distortion. It starts getting into a little bit of financial bringing in cane toads to try and get rid of another introduced species. Let’s not try and counter bad things with a potentially other bad thing. Let’s get rid of the bad thing initially.”

Before Matt and I appeared, Paul Holmes the Director of Disaster Relief, Legal Aid Queensland gave evidence in which he pointed out that loosening the rules in place fo mortgages would mean people would be more likely to borrow too much and get into trouble repaying their home loans much quicker.

He told the committee that people usually do everything they can to pay their mortgage and this has can have dire consequences:

“They don’t eat. Their kids don’t eat. They don’t spend on basic expenses such as going to see a doctor. I don’t want that as a life for people. That’s what people are currently doing. These are the people who could afford a mortgage. We are talking about people who aren’t able to afford a mortgage under the current. They are going to be in that position far quicker than people who currently have a loan. It is important, and we can’t forget the human here.”

To recap – the policy will introduce yet another distortion in to the housing market which will raise house prices and make it much more likely that people will find themselves in financial hardship.

So no. Not great.

Australians are the biggest gamblers in the world according analysis from The Australia Institute.

The rise in popularity of online and sports betting means that more and more young Australians are gambling – over 900,000 teenagers gambled in the past year, which is enough to fill the MCG nine times over. Almost one in three 12-17-year-old Australians now gamble, as do almost half of 18-19-year-olds. 

A 2023 government inquiry (the Murphy Review) made numerous recommendations that would help curb Australia’s growing gambling problem, and Australia Institute research shows that there is popular support for measures to ban gambling advertising. You can read the full results here: https://australiainstitute.org.au/report/polling-bans-on-gambling-advertising/

The US, which is Australia’s biggest research partner, gives money to projects that are hugely important

The Trump administration is now trying to leverage this funding to impose its extreme views. Australian universities have been quizzed on things such as whether a project “defend[s] against gender ideology”, is “a climate … project” (because it’s now ‘woke’ to believe in climate change), or includes “DEI [Diversity, Equity and Inclusion] elements”. Some funding has already been cut from at least six universities.

So far, the Albanese Government has taken the same hands-off approach to problems in universities that federal governments have taken for decades. The federal government provides substantial funding to universities, but most regulation is left to the states, which have mostly also not taken responsibility. This has created a general governance crisis in the sector.

In 2023, the Government declined an invitation to join the European Union’s $163 billion research and innovation fund, potentially due to cost concerns, which would have diversified Australia’s research partnerships. Domestic funding isn’t enough because Australian governments have also not invested enough in higher education; Australia’s direct public spending on Research and Development is among the lowest in the OECD. In response to Trump’s ‘woke ideology’ questionnaire “Germany, Canada and the United Kingdom … are very deliberately” not responding, but Australia’s universities are apparently being told they “should probably respond” to it, so far there is no evidence of a coordinated response from the federal government.

The university sector is in desperate need of accountability and responsibility, it’s time for the federal government to take this role. It could start by implementing a range of reforms recommended by the Australia Institute.

Eyes are now turning to Martin Place and the RBA Board decision, so we will leave Malcolm Turnbull there (although he seemed to have a very good time).

It is time to have the fourth coffee of the day and my colleague Glenn is throwing around M&Ms so we need to get in on that. Take a short break and we will update you with everything you need to know when you get back.

What does Malcolm Turnbull think of Peter Dutton’s plan to cut the public service?

Turnbull:

I won’t either support it or oppose it but I’d just make this point – it was becoming very obvious to me when I was prime minister – and this is why we set up this inquiry and something that Martin Parkinson and I talked about a lot and we set this up, as becoming obvious to me that there were far too many consultants being used.

Now, I’ve got nothing against consultants. I’m sure many of them are here. Love you all, but you run the risk that you deskill the APS.

So you’ve got to I’ve give you an example – and this is the attitude and this is what – my colleagues, particularly Matias [Cormann], had a different view.

I am sceptical about the cult of consultants. I’ll give you an example. When I was Communications Minister, I wanted to have a line-by-line cost review of the ABC and SBS, the public broadcasters. Lucy and I had done that for the Ten Network in the early ’90s, so I knew what – when we restructured the Ten Network, so I knew what needed to be done and I said to the department you should do this and they said we’ll have to get a big consulting firm in and I said, “Hang on. You’re the department of communications supervising the public broadcasters is your core business. You do it.”

And I insisted that they do it. A very smart man who had just retired as the Seven Network and got him as a domain expert for a modest fee but that was the only consultant we had and they did the work but it was really interesting to me, coming back into government in 2013 after having been out since 2007, how the reflexive action was get a consultant, get a consultant.

I think we need to ensure that the APS is efficient that competent people are retained and incompetent ones are eased out, but you cannot afford to deskill the public service. That is – that was actually the reason one of the main reasons why that inquiry which David Thodey chaired was set up. Sadly I wasn’t around when it reported. Do you think Labor is heading in the right direction in terms of hiring more public servants? As long as they’re capable. It’s like defend spending. Is it better to spend 4% or 3% or 5% of GDP on defence? Well, it depends what you’re spending it on. Is it better to have 50,000 or 40,000 public servants, it depends on how capable they R it’s always a good day to hire capable people. The concern is you run the risk of deskilling your APS and you say to a young person who wants to do this kind of work, if you want to do really interesting work, get a job with a consultant, don’t work in the APS and that’s a problem.

What does Malcolm Turnbull think about Peter Dutton saying he wants to live in Kirrabilli House on the Sydney Harbour, instead of Canberra and The Lodge? (Turnbull lived in his own home while prime minister)

Turnbull:

He’s been in Parliament longer than I was and he’s run in more elections than I did. But if I was running in a seat in Brisbane, I wouldn’t be saying the minute I become prime minister I’m leaving to live in Sydney. I don’t think it’s a wise thing to say. Obviously Lucy and I stayed living in Sydney. We stayed in our own house in our own electorate, in the centre of our own electorate where we’ve been for 30 odd years. I think that will be used against him but I don’t think it’s going to – you know, this is one of the kind of gotcha issues in the election. I don’t think it’s a big deal but I’m sure he’s regretting having said that

Some in the gallery are just waking up to the fact that Australians are growing increasingly worried about the Trump administration, but don’t necessarily feel the same about a threat from China. (Welcome! Great to see you! There can be a habit in media of not actually believing something until your own cohort have validated it. Kind of like we can all see what is happening in Gaza because of the very brave Palestinian journalists who continue to risk their lives recording the genocide of their people for the world to see, but because ‘western’ journalists are not in Gaza (as Israel won’t allow them in) it doesn’t have the same level of legitimacy (in terms of how western media organisations see it)

Turnbull is asked about the SMH/AGE poll which found what Australia Institute polling released a month ago found (now it has a media masthead stamp it is “fascinating” apparently) and Turnbull says:

China is a partner on the economic front and in many other areas indeed and there are plenty of technological areas where we cooperate and could do more. You know, I’m President of the international hydro power association and Lucy and I have a renewable development company working on some pumped hydro projects.

The expertise and experience in China on pumped hydro where, they’re building an enormous amount of it, is valuable and I would welcome the opportunity to learn more from their experience. But there are security issues.

And so you’ve got to look at the relationship with other countries in some ways a bit like the way you look at relationships with other people. There is a boundary of trust. There are things you would say to your wife or husband that you may not say to your best friend. And there are things that you would say to your best friend that you wouldn’t say to everybody you work with.

And so I think we have a much, much greater circle of trust with the United States but – as to all its allies. The US one of its greatest assets vis-a-vis China in terms of geopolitical competition, is the alliance system. China has very few allies. If you can call it that.

And America has many. But there is no question – of course this is the point I made on Bloomberg that upset Mr Trump so much, so I hope he’s not watching the ABC or I’ll get another Truth Social post, but the point is that China will take advantage of this.

Now, I don’t… We are not trying to hedge between China and the United States. We are very, you know, very committed to the relationship with the United States and disrupting of that relationship is coming solely from the Washington end at the moment. There are plenty of countries in our region and elsewhere in the world who do hedge between China and the United States and if the United States inflicts serious economic damage on a country, they will look more favourably on China. So I think that’s, you know, it’s a competitive world out there. America is not the sole superpower it once was.

On Australia sending peace keepers to Ukraine, Malcolm Turnbull says:

I thought Albanese made the right decision there and I’ll explain why. He stayed in the conversation. The signal Dutton was sending will be seen as washing our hands of Ukraine. It was quite… I think it was the wrong judgement call. And everyone makes mistakes. I think he made a wrong call there. Obviously peacekeepers do not go there unless there is peace and the Russians have said they’ll never accept them. So this is all hypothetical.

What Albanese said was, yes, we’ll stay in the conversation. We’re committed to supporting Ukraine. We’ll send someone along to the meeting and, you know, subject to a million factors, we are not, in principle – we are, in principle, happy to be part of it. I think that was a better call. He hasn’t committed to anything and, as I said, peacekeepers only turn up if there is peace. So I think Peter, you know – and, again, as you know, we’ve identified a few potential errors I made but we all make mistakes.

There it is. I don’t think much will turn on it, but it sent – I thought it sent the wrong signal to be honest. I think solidarity with Ukraine is very important and it’s important if you want to distinguish yourself from Trump too, if that’s part of your political mission, your communication mission.

Q: How do you feel about the current election we’ve got at the moment?

Malcolm Turnbull:

I find it one of the most exciting elections I’ve ever seen. Don’t you?

I can’t drag myself away from the television! I’ve seen a few. I tell you what. It is… It is sort of – there are certain… It’s kind of a cultural continuation, you know, the democracy sausage, Antony Green, of course, for this election at least, and also, of course, wars about corflutes. Putting corflutes up. ‘He stole my corflute. Where’s my corflute. No, I didn’t’. It’s great. If you’ve run, as I have, in a marginal seat and ended up not being marginal, at least for my candidacy, but you get into all this grass roots stuff and I don’t miss it, no.

Q: Are you planning on campaigning at all for the Liberal Party?

Turnbull:

No. I think… No. No, I’m not. I’m not campaigning for anyone.

Q: Voting Liberal, though?

Turnbull:

It’s a secret ballot.

Q: So Dutton’s public sector cuts and his commitment to I guess addressing a woke agenda appear to take inspiration from Trump. Should Australia be looking to the US for policy inspiration right now? And what kind of risks does it pose?

Turnbull:

As to whether Peter Dutton is taking inspiration from Donald Trump, that’s, you know, a matter for you to write about or Albanese to claim. I’m not going to buy into that. But certainly I wouldn’t be taking inspiration from Donald Trump’s policy agenda. Leaving aside all the public service cuts and the DOGE stuff and the, you know, the DEI campaign and anti-DEI campaign and, you know, the down with work from home. None of that is very popular here of course. But the big thing is protectionism. We are an open trading country. I cannot tell you the damage – Heather Smith spoke it very eloquently yesterday, an experienced economist and national security specialist. We face enormous damage potentially from a global trade war. It’s not just tariffs on our stuff that goes to America. It means there will be retaliations around the world and the trading system will close up and, you know, this is what made the Great Depression as bad as it was, America doing this in the Smoot-Hawley tariffs it wasn’t just those tariffs. It was the fact that everyone retaliated. So it’s a chain reaction.

There is ONE reason I know about the Hawley-Smoot tariffs and it is because of…anyone? Anyone?

Ferris Bueller’s Day Off.

I think the guy playing the teacher is an actual economist and his dad worked for the Nixon administration and he’s very conservative himself, but he ad-libbed this.