More mea culpas from bankers don't better lending conditions make
The word of the day is trust. The Crawford Leadership Forum was held in Canberra this week, exploring ways to rebuild public trust in government, business and other institutions. I'll come back to this shortly - but first, this moment's example of trust misplaced continues to be Mascot Towers.
In the past 48 hours, the situation has worsened with revelations from project engineers that the structure looks to be sinking - although the building's owner's corporation disagrees. NSW premier Gladys Berejiklian sought to spread the pain beyond her jurisdiction yesterday, saying struggles with building regulations aren't restricted to NSW.
The flow-on effect for other developers continues to grow. We're seeing more stories like this one showing that Mascot Towers is not an isolated event, and proving Gladys's point. The Herald has published a catalogue of the Mascot Towers developer's other projects across Sydney, and criticism of parties involved in the construction of Mascot Towers has extended today to draw in the local council's alleged role in the situation.
If Mascot Towers is keeping Sydney journalists in clover this week, Melbourne's equivalent is combustible cladding. Today's revelation from the AFR's Michael Bleby is that high-rise residential building certifiers and fire engineers are becoming uninsureable; since 2017, $3.43 has been paid out in claims for every $1 received in premiums, according to a PwC report. Mr Bleby has also reported today that the Victorian government is stepping in to commit public money for rectification of combustible cladding issues on the state's privately-owned buildings.
Words from the pundits: super is building wealth, property not so much
Big news today for fans of the Australian superannuation system, with news that for the first time, more than half of 66-year-olds were not accessing the age pension at the end of 2018 as their assets and income were too high.
That's the long-term view. For all you short-timers out there, here's the news for households who count property and shares among their assets: they have contributed to what Fidelity International estimates is a $500 billion wipe-out of Australian household wealth in 2018.
The Morrison government is working on getting its three-stage tax package through over the next week, which ANZ estimates will add 0.6 per cent stimulus on average to Australian households. Whether that gets people spending again remains to be seen.
While that's happening next week, the Reserve Bank will be meeting to make the call on interest rates. The Australian's James Kirby reckons today that the June cut reduced the looming risk of interest-only lending to the property sector.
Speaking of lending, ANZ head Shayne Elliott is quoted today saying it's become clear the banks have gone too far in restricting credit availability in the wake of the royal commission into the financial services industry. Going further, outgoing NAB chairman and royal commission scalp, Ken Henry was speaking at the Crawford Leadership Forum this week saying his institution has let its customers down.
Which brings us back to trust.
AFR columnist Jennifer Hewett's offering today explores Australia's growing mistrust of institutions in a fragmented, always-on media environment. Her conclusion that forums like Crawford end up as little more than hot air, without governments and companies actually delivering on the soul-searching.
There's a lesson here for regulators and operators in the Australian building and construction sector, particularly those watching what is happening with Mascot Towers and hoping the media loses interest and moves on. As long as the underlying problems are left unaddressed, trust issues between consumers and developers will continue to grow.