$12bn infrastructure fund and 83,000 skilled workers needed for 1.2m homes target

Jim Chalmers has been urged by developers to lift funding for enabling infrastructure to $12bn and fast-track 83,000 skilled workers for Labor to deliver its 1.2 million new homes pledge.

Anthony Albanese and NSW Housing Minister Rose Jackson in Sydney to open a new social and affordable housing development in Marrickville. Picture: Gaye Gerard/NewsWire

Australia’s biggest residential builders have told Jim Chalmers the government must lift its funding commitment for enabling ­infrastructure to $12bn and bring on an additional 83,000 skilled workers for Labor to have a shot at building 1.2 million new homes by mid-2029.

With the Albanese government on track to fall short of its new homes target, the nation’s peak housing group has written to Treasury calling for an extra $12bn over five years to support residential development.

To date, Labor has announced more than $1.5bn in funding for enabling infrastructure and the Coalition has pledged up to $5bn.

Both fall short of the proposed $12bn fund suggested by the Housing Industry Association to deliver enabling infrastructure such as roads, water and sewerage.

The HIA’s pre-budget submission said Australia must build around 240,000 new homes a year to “meet demand and put downward pressure on affordability”.

With 180,000 homes completed in the past 12 months, the HIA submission said “not only is this shortfall driving up prices, worsening affordability, and placing enormous pressure on renters and families across the country, it also means we are set to fall well below the government’s commitment”.

As builders face crippling workforce shortages, the HIA is pushing the government on a “streamlined and simplified visa program for in-demand trades, including a commitment to fund the development of a construction trade contractor visa”.

“Data shows just 3644 workers on temporary skill shortage visas are currently working in these key trades. This equates to only 0.8 per cent of the workforce,” the HIA submission said.

HIA managing director Jocelyn Martin said Australia was “facing a critical shortfall in housing supply, with only 180,000 homes built in the last year – well below the 240,000 needed annually to meet demand”.

Ms Martin said the “average cost of a house-and-land package in major cities is now $1.3m, making homeownership unattainable for many Australians”.

“This is not just a numbers issue, it’s a crisis that is affecting families, renters and would-be homeowners across the country,” she said. “The lack of essential infrastructure is a handbrake on housing supply, and this budget must take steps to prioritise infrastructure funding to fast-track projects and make land ready for development.”

The submission also calls on the government to consider allowing superannuation for house purchases to help first-home buyers crack the market and the expansion and simplification of programs including the home guarantee scheme.

Anthony Albanese last week announced the government would provide $10,000 cash incentives to boost building apprentice completion rates and expand the tradie workforce.

Housing Minister Clare O’Neil, who is leading Labor’s $32bn Homes for Australia plan, on Friday will unveil the first group of projects to sign contracts delivering new social and affordable homes under round one of the $10bn Housing Australia Future Fund.

Some of the 12 projects, which will deliver more than 800 homes in five states including in the battleground seats of Boothby and Bass, have commenced construction and are expected to be completed by December.

The HAFF’s first round of funding is expected to unlock $9.2bn of investment, with more than 13,000 social and affordable homes receiving support. The Albanese government is promising 55,000 homes over five years.

“Labor’s building Australia’s future with the largest investment in social and affordable in over a decade – eclipsing the Coalition’s efforts in more than a decade in office in just the first round of Labor’s housing fund,” Ms O’Neil said.

A separate HIA report card, marking the performance of states and territories that have control over housing supply warns they are behind schedule. Under the 1.2 million homes pledge, states and territories have set targets of 376,436 in NSW, 306,324 in Victoria, 245,740 in Queensland, 129,086 in Western Australia, 83,811 in South Australia, 26,117 in Tasmania, 21,059 in the ACT and 11,427 in the Northern Territory.

Ms Martin said “inefficiencies in our planning systems are ­strangling housing supply”.

“It’s time for a national strategy to align efforts across all levels of government, streamline processes and remove regulatory hurdles that are inflating the cost of housing,” she said..

“A national planning summit would be a powerful first step in driving genuine reform.”