Jim Chalmers presents a landmark report on Australia’s ‘well-being’, but the findings are fatally flawed

A landmark national ‘well-being’ report has been slammed as useless after using outdated data to suggest things had ‘looked up’ for Australian home borrowers, even after 12 rate hikes.

Treasurer Jim Chalmers’ inaugural report ‘Measuring what matters in Australia’s first welfare framework’, published on Friday, contained a number of findings based on old information.

A section called ‘being financially secure and having access to housing’ compared the serviceability of housing in 2002-03 with 2019-20.

The situation for mortgage holders was described as “improved” despite interest rates rising 12 times in 13 months with further increases expected in 2023.

When asked about the outdated information, Dr. Chalmers told ABC Radio National broadcaster Patricia Karvelas that the government had more recent data that it could trust.

“Well, a couple of things about that,” he said.

“We have more regular and frequent data that helps us understand the pressure people are under due to higher interest rates and after the pandemic.”

But Dr. Chalmers denied that the report fell short.

‘I’m not saying that. I am saying that we have never had a national welfare framework before, this is the first attempt,” she said.

Shadow treasurer Angus Taylor said on Friday the report was “out of date and out of context”.

“We don’t need a half-baked report on Australia’s welfare,” he said.

‘The Treasurer needs a reality check, and the truth is Australians have seen 11 interest rate hikes since Labor came into government.’

Wells report’s information on “housing serviceability” was so out of date that it cited data from the 2019-20 fiscal year when the Reserve Bank of Australia cut the cash rate four times: from 1.25% in July 2019 to 0.25% on March 20, 2020 at the start of the pandemic.

But since May 2022, just before the election, the RBA has raised interest rates 12 times, from a record low of 0.1 percent to an 11-year high of 4.1 percent, pausing only in April and July.

Far from being easier, a borrower with an average mortgage of $600,000 has seen their monthly payments increase by 64 percent to $3,789, up from $2,306.

Annual payments have skyrocketed to $17,796.

This occurred when variable rates on a Commonwealth Bank loan, for a borrower with a 20 percent deposit, increased to 6.49 percent, from 2.29 percent.

Australia’s Labor government has copied former New Zealand Labor Prime Minister Jacinda Ardern, who in 2019 delivered a “welfare” budget.

The situation for mortgage holders was described as “improved” despite interest rates rising 12 times in 13 months with further increases expected in 2023.

Interest rates in just over a year have risen at the fastest pace since 1989 and the RBA expects them to stay above their two to three percent target until mid-2025.

The report also focused on the cost of housing before the pandemic, but said nothing about the rise in house prices between late 2020 and early 2022, which decreased housing affordability, when interest rates were still at a record low of 0.1 percent.

“These cost-to-revenue ratios have generally been stable for the past several years prior to the Covid-19 pandemic,” he said.

Dr. Chalmers said in a statement that the well framework was designed to “help tell us how we’re tracking over time, where we’re doing well, and where we need to do better.”

“Measuring what matters is part of a deliberate effort to put people and progress, equity and opportunity at the very center of our thinking about our economy and our society, now and in the future,” he said.

Australia’s Labor government has copied former New Zealand Labor Prime Minister Jacinda Ardern, who in 2019 delivered a “welfare” budget.

Australia has a habit of copying Kiwi’s ideas, adopting inflation targeting in 1993, three years after New Zealand did.