Budget 2024: Light-bulb moment puts housing fix in ALP’s orbit

Treasurer Jim Chalmers. Picture: NCA NewsWire / Martin Ollman

The eureka moment seems to have finally arrived for the Albanese government.

Cost of living is and will continue to be the principal concern for most Australians and the only concern for some.

And one of the most pressing components of that concern is the cost and availability of housing.

Having spent the past two months spruiking the virtues of a clean energy economy and a Future Made in Australia as being the centrepiece of the budget, the great repivot is coming.

Jim Chalmers will now put housing up in headlights next Tuesday as one of the single most important budget measure to address cost-of-living concerns.

This is a clear recognition that Chalmers’ pre-budget messaging up until now has been confused and misdirected.

Equally, it can only be read as an acknowledgment that the current housing settings the government have in place – amounting to $15bn across 17 different schemes – aren’t going to get the job done.

Chalmers was surprisingly frank about the problem, in an interview with The Australian on Thursday, having conceded that the government will struggle to reach its 1.2 million new homes target unless a lot of things go right.

Throwing billions more into the housing shortage will doubtless be welcomed by the industry. More money is good. But no amount of money will get Labor closer to its goal unless other problems are resolved.

Many of the roadblocks to Albanese’s ambitions lie with the planning and approval processes at a state and local government level. And until the Treasurer can conjure an antidote for nimbyism and provincial mediocrity, then those roadblocks will remain.

But Chalmers also stretches the bounds of credulity in his claim that his framing of the budget is based entirely on economics and he gave no consideration to the politics.

Yet he knows as well as any of his colleagues that there is no space – with the exception of energy and tax – that is more politically contested than housing. Labor is being squeezed on the left from the Greens on rents and risks being crushed by the Coalition in the outer suburban seats on mortgages.

Chalmers’ message out of Tuesday’s budget needs to be sharp and unambiguous, unlike the tortured narrative to date, which is not all his fault.

And there are signs that he recognises the problem. His budget speech, we are told, is now likely to steer the government’s minds back to the fundamentals: inflation, cost of living and housing.

This is all well and good, but if Treasury continues to play smoke and mirrors on spending – which will define the success or failure of Chalmers’ third budget, and possibly last before the election – then it could all come horribly unstuck.