Chris Smith:
Thank you very much for that. Adam Creighton is a Senior Fellow and Chief Economist with the Institute of Public Affairs, Columnist with the Australian newspaper as well. We catch up with him every week and it’s a delight to have him on again. Adam, good morning to you.
Adam Creighton:
Good morning, Chris. Great to be here.
Chris Smith:
Well, treasurer Jim Chalmers has now admitted that his budget tax changes have contributed to house prices plunging, but says it’s only one factor. I still can’t fathom how he and all of treasury have so badly misread the fallout and have underestimated the impact those changes would have on sentiment and house prices.
Adam Creighton:
Yes. Yeah, certainly that’s true. Look, it was already the case earlier in the year that the housing markets were likely to soften, but there’d been significant price increases in Sydney, Brisbane, Adelaide, and certainly Perth as well. Plus you’d had a couple of interest rate increases. And of course there’s for quite a few months now been the prospect of a sharp downturn in migration into Australia once one nation’s impact is fully felt on policy as it certainly is going to be. And then of course you tipped onto that, these very significant changes to the tax system. So yeah, there are rapid falls in dwelling prices, houses and apartments in all the major capitals now.
So I expect most of the damage to be the top half of the market I think is probably going to be the case because that kind of got spectacularly out of hand in some cases, especially in Sydney and Perth and places like that. But nevertheless, there are significant falls and it’s worth pointing out, we often talk about house prices in terms of nominal dollars, like, what you actually paid five years ago or so forth. But remember there’s inflation during that period. So the real change in prices is actually much worse once you factor in what inflation’s been. There’s all sorts of news ads saying, “Oh, I paid a million dollars five years ago, sold it for 1.1.” Well, if that’s the case, you’ve made a shockingly huge loss, shockingly huge.
Chris Smith:
Yeah, yeah, yeah. Very true. Meanwhile, us mortgage holders need to brace for further rate rises after yesterday’s growth figures. The actual growth figures were underwhelming, but enough to worry the RBA, right?
Adam Creighton:
Yeah, certainly that’s right. I mean, it’s always per capita growth that matters per person. Australia has long had positive growth simply because we tip so many people into the country every year. So it’s no great skill to have rising GDP if you’ve got massive immigration. But as the IPA has calculated now, 10 of the last 16 quarters, you know, well over half GDP per person has shrunk. So that I don’t think’s ever happened in Australian history before. That’s really, really bad. Very, very strange. And actually the IPA to its credit, not to blow my own trumpet or blow our own trumpet, but they produced this fantastic chart this morning, which just shows growth in per capita GDP over the course of all the governments going back to Fraser. And Fraser’s government’s managed about a 9% increase, Hawke Keating over 30%, Howard over 30%, Rudd Gillard about 5%, the last coalition government about nine. And Albanese is the only one where it’s actually negative, negative minus one. So in the whole four years, per person GDP has gone backwards.
Chris Smith:
Yeah. That is not something to boast about. Meanwhile, we’ve got the scales of growth being tipped according to the statistics because so many nervous Aussies went out and bought electric vehicles, right?
Adam Creighton:
Yes, yes. So there was a petrol shock, of course, with the war. The prices has come back down again. There’s been a significant increase. I think it was something like 148% increase in EV sales from last August to this August, I think, according to one source I’ve looked at. But look, they’re still small and absolute terms. There’s still a minority of new vehicle sales. And I think what’s always lost in these things is that the outstanding stock of cars on the road still are overwhelmingly petrol-based. And the idea that they’re all going to be switched over by 2050 is just laughable. It’s not going to happen. And look, I was at the Bush Summit that News Corp put on last week with Hancock prospecting. It was very interesting and the head of Toyota was there and he was just saying that their electric HiLux in the country is just basically not solved very well and that diesel was still the king of transport in this country and basically would be for a very long time.
Chris Smith:
Yeah. I want to talk about the Prime Minister who yesterday was asked a few prickly questions about his climate minister’s expensive pre-conference climate conference in Fiji next month. He had the temerity to defend, one, the poor attendance and also the cost. And he was blowing the trumpet of the Pacific and he sort of twisted the questions into an answer that suited him. Have a listen to how he went about this.
Journalist:
Pre-COP was about building momentum. It’s also going to cost taxpayers a lot of money, more than $20 million. Is that money well spent considering only five leaders are showing up at a time when Australia-
Anthony Albanese:
Well, that’s not true. With respect, you are being so disrespectful to the Pacific leaders who are here.
Journalist:
That was what Fiji said, though.
Anthony Albanese:
Did they count Fiji? Did they count Australia?
Journalist:
Non-Pacific leaders.
Anthony Albanese:
Did they count-
Journalist:
No. The non-Pacific leaders-
Anthony Albanese:
Well, you’re being very disrespectful here in the Pacific.
Journalist:
Five world leaders in total.
Anthony Albanese:
Well-
Journalist:
Yeah. Outside of the Pacific.
Anthony Albanese:
Well, sorry, but we need to actually have some respect for the process and-
Journalist:
What about respect the taxpayers?
Anthony Albanese:
… respect for our Pacific leaders. And Australia has an absolute interest in engaging with the Pacific.
Chris Smith:
Oh, disrespectful. It was Chris Bowen who said, “The world will gather in Fiji.” Well, the world has not gathered in Fiji-
Adam Creighton:
No.
Chris Smith:
… and tells us a hell of a lot about the fact that we will go to a COP meeting, but we don’t need a pre-COP meeting for COP.
Adam Creighton:
Yeah. Look, it’s just all very funny, isn’t it? I mean, these pre-meetings, but look, what’s not funny is the cost of these things. I mean, just this one alone, I think $25 million or something for Australian taxpayers. And yeah, they’ve got basically no leaders coming at all. I think there’s a couple of ministers coming from Mexico and Germany, but they’re just ministers. And the actual world leaders are from … Oh yeah, here we go. I’ve just looked it up. The world leaders that are going are from Antigua, from Cabo Verde, from the Maldives and East Timor. So I mean, that’s … Yeah, I don’t even know if they rank really as world leaders, to be honest.
Chris Smith:
Well, they’ve got nothing better to do, obviously.
Adam Creighton:
Well, that’s right. Nothing better to do. So look, I just think that the bigger picture message here is the world’s just losing interest in all this net-zero climate change stuff.
Chris Smith:
Yeah.
Adam Creighton:
I mean, I’ve been saying that for about six months now and some people have said, “No, no, no.” But look, I think politically the caravan’s moving on because of the cost and frankly because of all the scary forecasts just keep not coming through.
Chris Smith:
Yeah, it’s very true. One final one. I see that an IPA education survey has found that teachers are wasting one-third of lesson time dealing with disruptive students who talk, talk back, and even behave violently. This author is saying, “We need a UK style behaviour curriculum.” Something needs to be done. I don’t know whether the UK is onto this adequately or not, because without discipline in the classrooms, no one learns. No one, even the ones that are behaving don’t learn.
Adam Creighton:
Yes. Look, there’s certainly been deterioration in standards of behaviour and certainly outcomes at school. I see this report has been done by the wonderful Colleen Harkin. I would say, look, I think a few things would have to be … I mean, I think removing phones from school hours I think is very important because the kids just don’t pay any attention to what they’re being told ’cause they’re staring at their phones. I mean, I think that’s been a disaster for learning. I think teachers aren’t able to discipline children like they used to because they’ll either face the wrath of their parents or the government bureaucrats that oversee them. So more and more parents, I think if they can try to send their kids to private schools if they can afford it. And many teachers, maybe it’s a good thing that the kids don’t listen sometimes because you know a lot of it now is just political indoctrination. And indeed in Victoria, they had the gall, some teachers, to encourage their kids to skip class and go and protest against one nation.
Chris Smith:
Yeah.
Adam Creighton:
I mean, those teachers should be sacked in my view.
Chris Smith:
Yeah, without a doubt. Without a doubt. They are not helping the situation doing all of that.
Adam Creighton:
Right.
Chris Smith:
And I understand there are some more coming up before the end of the year, by the way.
Adam Creighton:
Some more protests. Well, that wouldn’t surprise me. And also these are the teachers that just got a 28% pay rise by the Victorian government. So 7% a year, I think over four years, which is just astonishing negligent in a state with massive deficits and around $200 billion of debt.
Chris Smith:
Spot on. Spot on. Thank you very much for your time this morning, Adam. We do appreciate it. We’ll come back and talk to you next week.
Adam Creighton:
Indeed. Thanks, Chris.
Chris Smith:
All right, good on you. Adam Creighton from the IPA.
This transcript with Adam Creighton talking on Mornings – 2SM from 3 September 2026 has been edited for clarity.
