Experts mixed on Coalition’s $5bn housing pledge

Peter Dutton’s $5bn pledge to fast-track shovel-ready developments has received mixed reviews from housing policy experts, handing Labor ammunition ahead of the election.

Peter Dutton pledged on Saturday to devote $5bn to establish enabling infrastructure at greenfield sites. Picture: NewsWire / Martin Ollman

Peter Dutton’s $5bn pledge to connect water, sewage and power to shovel-ready greenfield developments has received mixed reviews from housing experts, handing Labor ammunition ahead of an election set to be dominated by the contest over home ownership.

The proposal, unveiled by the Coalition on Saturday, aims to support the construction of 500,000 homes on greenfield sites, with the Opposition Leader also announcing plans to suspend changes to the National Construction Code for a decade in a bid to reduce compliance costs.

Peter Tulip, chief economist at the Centre for Independent Studies, a centre-right think tank, said the Coalition’s focus on enabling infrastructure would deliver better “bang for your buck”, enabling the private sector to overcome barriers to construction.

“The Coalition’s proposal will do more for affordability than Labor’s policy,” Dr Tulip said. “There are many places where, for relatively modest sums, the government can remove blockages and let the market go ahead.”

The Coalition’s housing proposal is based on modelling undertaken by the Urban Development Institute of Australia, a development industry lobby group, which estimates the cost of enabling infrastructure in greenfield sites at $10,000 per dwelling.

However, other housing policy experts were less convinced. Ben Phillips, an associate professor at the Australian National University’s Centre for Social Research and Methods, acknowledged that while the Coalition’s fund would encourage some new builds, its target of 500,000 was “wildly optimistic”.

“Inducing 500,000 new extra new homes would be the most extraordinary outcome achieved in the housing space in Australia ever,” he said.

Grattan Institute economic policy program director Brendan Coates welcomed the Coalition’s announcement as “a step in the right direction”.