Matthew Bowes

Event: 2025 Summer Reading List for the Prime Minister - Grattan Institute Sign up to attend the official launch of the 2025 Summer Reading List for the Prime Minister, at the State Library of Victoria.

If you're in Melbourne, and want to hear more, you can sign up for our free event, coming up on Thursday 11 December at the State Library. 7/

Marc Dunkelman's book 'Why Nothing Works' is the under-rated 'abundance' book of 2025. It's analysis of the history of US progressive politics, but with plenty of lessons for Australian policymakers thinking about how to improve state capacity. 6/

The Price Children Pay for Exclusive Suburbs | Inflection Points Diverse schools are a key tool for economic mobility. But current policy is making schools less, not more, diverse.

Katie Roberts-Hull's essay 'The Price Children Pay for Exclusive Suburbs' is an insightful analysis of the link between Australia's poor urban planning policies and a lack of access to educational opportunity. 5/

Ben Chu's book 'Exile Economics' is a compelling case for a more interconnected world, at a time when issues like security, sovereignty, and inequality are leading many nations to pull back from trade and migration. 4/

There's a bunch of great reads across both lists, but I thought I'd highlight three that I particularly enjoyed reading. 3/

Announcing Grattan Institute’s 2025 Wonks’ List - Grattan Institute Grattan Institute curates the year’s best technical reads for policy enthusiasts.

Our Wonks' List includes some great technical policy reads, including four insightful journal papers, two thoughtful books, and a cracking essay. 2/

I've had a great time reading and discussing a wide range of books this year to help find the best policy-relevant reads for Grattan's Prime Minister's Summer Reading List. Catch the full list on our website, along with our accompanying Wonks' List. 1/
grattan.edu.au/news/...

GREEN SHOOTS FOR THE GRASSROOTS MAINTAINING TRUST IN OUR DEMOCRACY BY RESTORING PARTICIPATION IN DEMOCRATIC INSTITUTIONS This paper proposes interconnected reforms that aim to rebuild trust in Australia’s democratic institutions — our Parliament, our political parties and the ecosystem of creative conflict they drive. These institutions are a great strength in our system and shouldn’t be circumvented, dismissed or ignored by policymakers. For decades, Australia was the world’s laboratory for democratic reforms. We led the way on the secret ballot, women’s suffrage (for some at least), a living wage for MPs, compulsory and preferential voting and more. But since the turn of the millennium, we’ve stalled out. For too many people, our democracy isn’t working — not the way it should and not the way we say it does. While better than many other countries, our system still leaves people feeling like their voice isn’t being heard or their vote doesn’t count. This term, we can fix that.

Two months ago, I wrote a paper for the Electoral Matters Committee. It clocked in at 23,000 words with 16 data tables, 11 graphs, 204 footnotes and 30,000 datapoints.

I made the case that we should take advantage of this historic juncture to expand participation in our representative democracy.

But Australia’s housing affordability problems are decades in the making. Governments can’t afford to wait any longer to implement evidence-backed reforms that allow for more homes where Australians want to live. 12/

I’ve appreciated much of the commentary we’ve received about our work, over the past 6 months and since it was released last week. Despite many differences of opinion, it’s great that a wide range of policy experts care deeply about making housing more affordable. 11/

These changes may sound small, but the impacts build up quickly, as this great Inflection Points chart shows. Following major planning reforms in Auckland in 2016, house prices grew slower than inflation, whereas they're up 30 per cent in real terms across the rest of NZ. 10/

The modelling in our report does not suggest that reforms will reduce house prices by $100k tomorrow. Instead, our work shows that expanding supply each year can reduce prices over time, leaving them 7% lower than otherwise within 5 years, or 12% lower within 10 years. 9/

So yes, upzoning can increase housing supply even as prices fall. But timeframes also matter here. Housing supply, prices, and incomes are growing all the time. It’s the cumulative changes to these factors over time that matter to Australians. 8/

Second, allowing more homes per site reduces land costs per dwelling, because costs are now split across more homes. Together, these factors mean upzoning can expand the range of housing projects that can be profitably built even as prices fall or stagnate. 7/

This happens in two ways. First, land costs for infill sites can fall when planning rules are made more permissible, because the supply of land where new housing is permitted increases, creating a more competitive market for developable land. 6/

Successful upzoning does lead to a long-lasting boost to supply, because it changes both sides of the profit equation. Specifically, upzoning reduces land costs per home, which are a key factor in development costs for infill housing. 5/

We model these development costs in detail in the report, as part of our analysis showing that recent NSW and Victorian planning reforms do create substantial ‘commercially feasible’ – i.e. profitable to build – housing capacity. 4/

Ultimately, the reason upzoning increases private housing supply is because it increases the places where housing is profitable to build, i.e. accounting for both the cost of development and housing prices. If no new profitable opportunities are created, supply won't change. 3/

Focusing solely on the price reduction runs the risk of 'reasoning from a price change'. As the headline above suggests, the logic is circular: more homes means lower prices, which means fewer homes? Clearly something's missing here. 2/

First, some context on the figure Gurran is talking about. In our report, we estimate that allowing more homes in our cities as we recommend – if adopted Australia-wide – could lead to 67k new homes per year and hence reduce the median house price by $100k within 10 years. 1/

Responding to our 'More homes, better cities' Grattan report, Professor Nicole Gurran wrote that our plan to boost housing supply needed a 'reality check' in part because 'building completions fall when prices stagnate'. Here's why that argument misses the mark. 🧵

To fix the economy, fix housing Australia’s economy is in a post-pandemic slump. To dig us out, state and federal governments must tackle the chronic shortage of housing in our biggest cities.

‘Australia’s economy is in a post-pandemic slump. To dig us out, state and federal governments must tackle the chronic shortage of housing in our biggest cities.’

Catch our latest piece in Pearls and Irritations:

How planning stops more housing - and how to fix it - Grattan Institute Planning regulations limit the density of our major cities. But changing planning restrictions could help fix the housing crisis.

'Housing in Australia’s cities is now among the least affordable in the world. At the heart of the problem is the fact we just haven’t built enough homes to meet rising demand.'

Catch our latest op-ed in The New Daily:

Thanks!

Chart showing Australia's dwelling stock used to grow much faster than the adult population but not anymore

1/ Housing in Australia's major cities is among the least affordable in the world.

A big reason is that we no longer build enough homes, especially where people most want to live.

Australia's cities have a lot to love. But a shortage of housing is pushing far too many out of the suburbs they want to live in, or out of our cities altogether. If we want to build the world's best cities, that has to change. 13/

By helping to ease Australia's housing shortage, these reforms would also push down housing costs, as occurred in Auckland following reforms to their planning rules in 2016. 12/

Our recommended reforms would boost Australians incomes by increasing productivity, create better-functioning labour markets by allowing people to live and work where they want, and reduce car use and hence carbon emissions. 11/

In Sydney we estimate that allowing multi-unit housing and flats up to 3 storeys on land currently zoned for low density would create capacity for more than 1 million 'commercially feasible' homes - homes that are profitable to build given current development costs. 10/

Thankfully, the politics of housing in our cities are changing. NSW and Victoria have introduced major reforms that we analyse in-depth in the report, and which I'll look to explore further in a future post. But clearly, there's still further to go. 9/