Revealed: How a failed housing fund left a $1.46bn hole in Sydney's future
A $1.46bn budget black hole has emerged after the NSW government's housing infrastructure fund catastrophically underperformed, raising only 2.6 per cent of its target.
A $1.46bn budget black hole has trapped Sydney in a never-ending housing nightmare.
The Daily Telegraph can reveal the NSW government has drastically fallen short on a plan to raise $1.5bn in infrastructure funding, hampering efforts to tackle the housing crisis.
The broken Housing and Productivity Fund, designed to pay for infrastructure such as roads, water and sewer connections, has raised just $39m – or 2.6 per cent of what was forecast last year.
The $1.46bn shortfall has been blamed on a planning system that makes it too costly and too difficult for developers to build.
A leading industry group has seized on the revelations, calling on Planning Minister Paul Scully to come good on a promise to overhaul how new infrastructure is paid for.
In 2023, Mr Scully declared a new Housing and Productivity Fund would deliver $1bn over four years to support housing growth.
The money was to be raised from developers in government charges.
Last year, Treasurer Daniel Mookhey said the fund was forecast to raise a whopping $1.5bn by 2026-27 from developers looking to build new homes.
But according to government annual reports, the fund had raised a meagre $39m in developer contributions by June 30.
The fund has note made any money, because developers have found it too difficult to build.
And without any money for infrastructure, building new homes will become even harder.
In the June budget, the Minns government announced changes to how housing-enabling infrastructure is funded.
Mr Scully said developers would be able to build new infrastructure themselves, rather than pay a levy to the government, in a bid to get more homes built faster.
But he is yet to release the details about the “works-in-kind” framework.
Until he does, the government “will keep falling behind its housing needs”, Urban Development Institute of Australia NSW chief executive Stuart Ayres said.
“With so few funds being allocated to new infrastructure having uncapped works-in-kind contributions is a no-brainer for government,” Mr Ayres said.
Government charges levies on developers been consistently raised by the industry as one of the biggest hurdles to building new homes.
In a statement, Mr Scully said the $1.46bn shortfall was due to the government giving “discounts” on development contributions.
“Contributions will continue to grow as more homes come through the pipeline from the Minns government’s planning reforms,” he said.
He said the government was “finalising” its guidelines for “works-in-kind projects” to “accelerate the delivery of the infrastructure communities need alongside new homes”.
Revelations of the black hole in infrastructure funding come a day after official data showed monthly housing approvals had slumped.
The Australian Bureau of Statistics data revealed only 3705 new dwellings were approved in October, down almost 1000 from a month prior.
NSW now needs to deliver about 7000 new homes each month to meet ambitious housing targets it agreed to as part of the National Housing Accord.
The NSW government will receive a share of a $3.5bn incentive fund if it can deliver the 377,000 new homes it promised by 2029. However, Premier Chris Minns last week said that money would be a drop in the ocean.
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Originally published as Revealed: How a failed housing fund left a $1.46bn hole in Sydney's future
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