Albo’s bold $11bn home build bid

The Albanese government will unveil an $11.3bn housing package, predominantly designed to boost the supply of social and affordable homes, as a centrepiece of its May 14 budget.

In a tacit admission that its effort to alleviate Australia’s acute housing crisis had not been enough, Labor will inject billions of dollars of additional funding to help accelerate new supply, combat homelessness and assist those fleeing domestic violence with crisis accommodation.

Revealing the announcement following a meeting of the National Cabinet on Friday evening, Prime Minister Anthony Albanese said Labor’s ‘Homes for Australia’ plan would keep the Australian dream of home ownership within reach.

“This budget means more tradies, fewer barriers to construction, less talk and more homes,” Mr Albanese said.

Albo’s bold $11bn home build bid

“This isn’t about one suburb or one city or one state. It’s a challenge facing Australians everywhere and it needs action from every level of government.”

The lions share of the package will be a $9.3bn worth of fresh funds to establish the new five-year National Agreement on Social Housing and Homelessness, with support to be administered by state and territory governments.

Representing a doubling of the federal homelessness funding to $400m a year, the states and territories will be cumulatively required to match the increased commonwealth spend dollar-for-dollar, ramping up crisis support and social housing supply.

Additionally, $1bn will be directed towards crisis and transitional accommodation for families and children feeling violent circumstances as voters demand the Labor government plays a greater role in eliminating family and domestic violence.

The commitment includes increasing the proportion of grants for this investment to $700m, up from a previous $175m, to run accommodation services.

States and territories are also set to benefit from a further $1bn for road, energy and other enabling infrastructure to support new home construction.

Federal Treasurer Jim Chalmers said the substantial investment, to be fully outlined next Tuesday evening, would help support new home construction.

“We’re delivering billions more dollars in the budget to build more homes across the country because we know that to address this housing challenge, we need to boost supply,” Dr Chalmers said.

New regulatory requirements will also be imposed on the tertiary education sector, requiring universities to increase their supply of student accommodation for domestic and international students.

“We need more purpose-built housing to support students in higher education and that’s what these reforms, developed in consultation with the sector, will help to drive,” Education Minister Jason Clare said.

Amid soaring rents, rock bottom vacancy rates and surging home prices, fuelled in part by weak home building activity and soaring international arrivals, has fuelled voter discontent and heightened demands for governments to address the cost and availability of housing.

Indeed, the government’s own ‘State of the Housing System’ report, released earlier this month, laid bare the challenges Labor faced in meeting its own targets under the National Housing Accord.

To meet the targets set under the accord, 1.2 million well-located homes will need to be constructed in the five years to 2029, demanding rolling annual average dwelling completions of 240,000.

But in its report, the National Housing Supply and Affordability Council found that the government was set to miss its target, falling 40,000 dwellings short of the final target.

On most recent measures, building approvals, a leading indicator of Australia’s residential construction pipeline, fell to just 162,649 in the year to March 2024 – approximately 77,000 short of the level required to meet the target.