Mixed reaction as Albanese homes in $11.3bn housing crisis fix

Labor will pour billions more into building new homes in a move welcomed by the housing sector, but slammed by its political opponents.

Labor’s $11.3bn housing package aimed at boosting social and affordable housing supply has been met with mixed reaction ahead of Tuesday’s budget, including claims it is “not new”.

After convening a national cabinet meeting, Anthony Albanese on Saturday announced his government would inject billions of dollars of additional funding to help accelerate new supply, combat homelessness, and assist those fleeing domestic violence with more crisis accommodation, in a tacit admission that its effort to alleviate Australia’s acute housing crisis had not been enough.

While key housing stakeholders like Homelessness Australia and Master Builders Australia have thrown their support behind government’s pre-budget announcement, the Coalition and the Greens have both slammed the package.

Michael Sukkar, the Coalition’s housing spokesman, said the announcement was a “fraud on the Australian people”.

“It’s a catastrophe that the government has confirmed there will be nothing in Budget to address or alleviate Labor’s housing crisis,” he said.

The $11.3bn funding package comes as cash-strapped renters and first time buyers struggle to find a home. Picture: NCA Newswire / Gaye Gerard

Greens housing spokesman Max Chandler-Mather slammed Labor for “repackaging” a Morrison government housing and homelessness agreement and announcing a $1bn package for social housing secured by the minor party in negotiations last year, and “pretending both are new”.

“What Labor has actually announced today is no extra money for social housing, nothing for renters and no plan to cap rents. This is a fake announcement and a disaster for renters,” he said.

“Today’s announcement is worse than tinkering around the edges, it is locking in the status quo, and will do nothing to tackle a housing crisis that is destroying millions of lives.”

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.

Speaking from Tasmania, Mr Albanese said Labor’s “Homes for Australia” plan would keep the dream of home ownership within reach by bolstering supply.

“Only Labor is committed to building more homes. Only Labor is committed to practical policies to go forward, which is what we have done with our $25bn before these announcement that we are making today,” he said.

An additional $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.

States and territories will benefit from a $1bn pool to construct enabling infrastructure. Picture: NCA NewsWire / Brenton Edwards

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.

Surging rents and runaway house prices have fuelled discontent among voters. Picture: NCA NewsWire / Max Mason-Hubers

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.