Housing spending blitz in budget

The treasurer has splashed the cash on the housing crisis, but sector heads say renters have been forgotten.

Jim Chalmers’ first budget marks the start of a spending bonanza on housing.

The centrepiece of the housing spend was the announcement of the National Housing Accord, aimed at addressing the supply and affordability of housing.

The accord brings together governments, investors and industry to tackle the housing crisis, Chalmers said in his budget speech.

“Rents are through the roof, and many families are struggling to keep up. Supply hasn’t kept up with demand, which means too many struggle to live close to where they work. Too many are stuck on waiting lists for social housing,” Chalmers said.

The accord has an “aspiration to build one million new, well located homes over five years from 2024”, the treasurer said.

“Most of this supply needs to come from the market, not the government. But there’s a role for government, and we intend to play a leading role – by coordinating and kick-starting the investment we know needs to happen,” he continued.

The budget commits an initial $350 million in funding for another 10,000 new affordable homes through the accord, on top of the government’s election commitments to build 30,000 new social and affordable homes in the first five years of the Housing Australia Future Fund and the National Housing Infrastructure Facility.

State and territory governments will also kick in with up to 10,000 new affordable homes, while working with local governments on land release and zoning policies.

See more: Australia could reap billions in benefits if we fix housing: report

“Institutional investors, including superannuation funds, have endorsed the accord and will work with us to leverage more investment that delivers for their investors’ and members’ interests, and for the national interest,” Chalmers said.

And peak construction sector bodies are also on board, he added, and will build the homes at a high energy efficiency rating.

Homelessness help

The budget also commits $13.4 million over four years, and $4.2 million each year ongoing, to develop a 10-year National Housing and Homelessness Plan in 2023.

To be developed in conjunction with states and territories, industry bodies and not for profits, the strategy will “support the development of short, medium and long term housing and homelessness policy”, the budget documents state. 

The National Housing and Homelessness Agreement (NHHA) will also be extended by one year until 30 June 2024 while the new agreement is developed. Funding for the NHHA extension has already been provided, while the homelessness plan will be partially funded through existing resources from the Department of Social Services.

See more: Housing and homelessness agreement savaged in Productivity Commission report

Long-term action on housing but no immediate relief

Emma Greenhalgh, CEO of peak body for low-income households National Shelter, said “housing is critical to the wellbeing of individuals and communities”.

“We commend the Treasurer and the Minister for Housing for enhancements to the election promise to address the national housing crisis by bringing forward its announcement of the National Housing Accord,” she said.

But while she noted the announcement would establish the architecture to address the housing crisis in the long term, she said it wouldn’t provide immediate relief for the more than 950,000 households currently in housing stress.

Greenhalgh said it was also disappointing to see no review of or increase to Commonwealth Rent Assistance or income support payments.

“Addressing housing supply is a critical part of the equation but providing lower income households more money in their pockets so that they can afford to pay rent will make a considerable difference to their housing opportunities, and ultimately their health and wellbeing,” she said.

The ACTU said the accord was “the first meaningful action by a federal government in many years aimed at addressing the housing supply shortfall.”

“The Housing Accord provides an opportunity for more working people to buy their own home and find affordable rental accommodation,” said ACTU Assistant Secretary Scott Connolly.

“House price and rent increases have outpaced wages for a generation and more workers are in insecure housing than ever before. Australians have lost a decade waiting for the previous government to increase investment in affordable housing, which coincided with a decade of wage stagnation. The Housing Accord is the kind of action we need now, more than ever. “

Mission Australia CEO Sharon Callister also welcomed the plan for one million new homes as “a very promising beginning for greatly improving housing affordability in Australia” but cautioned more detail was needed.

She said the federal government should also work with community housing providers “as an essential stakeholder” in designing housing solutions.

“The announcement of the National Housing Accord acknowledges that the stark shortage of social and affordable housing, soaring cost of renting and resulting rental stress, declining availability of affordable rentals and rising cost of living are currently accelerating Australia’s housing and homelessness crisis,” she said.

“Finding a safe, secure and affordable place to call home and being able to afford life’s essentials are ever-pressing needs for many people on low and middle incomes.

“We welcome the National Housing Accord, and beyond that the National Housing and Homelessness Plan, and look forward to working with the government and other stakeholders to ensure these measures are designed, developed and implemented to make the most of this game-changing commitment. We need to ensure that these measures work for those most in need.”

Nicholas Proud, CEO of PowerHousing Australia, the national peak for large growth and tier one community housing providers, said it was pleasing to see the delivery of housing assistance in the form of the accord and funding for election commitments.

“Housing stress in the rising interest rate environment is very real for increasing numbers of Australians, but the announcements of the federal budget will start to see housing play a more central role with all Australian governments committing to partner with industry and investors to see more social and affordable housing delivered,” he said.

But he said continued rent rises, a tightening rental market, the end of many fixed-rate mortgages and an increase in migration would put “upward pressure on housing”.

Senator David Pocock, speaking to the ABC after the treasurer’s budget speech, also noted that those on JobSeeker and in private rentals had been forgotten in the budget.