Federal Budget 2024: Massive $6.2 billion spend to tackle escalating housing crisis

The Federal Government will tip $6.2 billion of new investment into housing as it grapples with an escalating crisis crippling the sector that is likely to worsen.

This includes new spending of $1.4 billion within the Government’s pre-budget announcement of an $11.3 billion package to tackle the under-pressure housing sector.

Some of the biggest spending announcements include a $1.9 billion increase to the Commonwealth Rental Assistance program over five years from 2023-24, lifting maximum rates to about $24.99 a fortnight.

A new five-year agreement — struck at the national cabinet last Friday — will pour $423 million in Federal money into social housing and homelessness, increasing annual funding under the agreement to $1.8 billion per year.

As experts warn of worsening affordability in the years ahead, the Government says it will deliver the “biggest investment in social and affordable housing in a decade”.

This includes concessional financing of up to $1.9 billion for community housing providers and other charities to support 40,000 new social and affordable homes.

Women and children escaping family and domestic violence will be supported with an additional $1 billion targeted at crisis and transitional housing.

In the higher education sector, caps will be introduced for international students to force universities to build more student accommodation. Foreign students will be enrolled based on how much housing supply is available.

Treasurer Jim Chalmers said international student numbers had been increasing without a match in housing supply.

“This puts pressure on prices and rents, especially in our cities and suburbs,” he said.

“We have a more substantial, more sustainable approach.”

In a bid to tackle bottlenecks to new developments, the Government will spend $1 billion on enabling infrastructure to be shared across States and Territories in a move already welcomed by the private sector.

A housing support program will also offer States and Territories $500 million to develop infrastructure like connecting sewerage, water and roads.

Measures to tackle construction sector labour shortages will include $88 million over three years from 2024-25 for 20,000 new fee-free TAFE places.

Skills assessments for 1900 migrants who want to work in the housing and construction industry will be fast-tracked at a cost of $1.8 million.

The measures form part of the Government’s overarching Homes for Australia Plan that Prime Minister Anthony Albanese partially unveiled last week.

His announcement on Friday of an $11.3 billion package was met with claims that did not include any fresh spending.

Greens housing spokesman Max Chandler-Mather said earlier that the announcement “repackaged” the expiring National Housing and Homeless Agreement to extend it for five years with added indexation.

That agreement — due to expire in June — provided about $1.6 billion a year to the States and territories to offer more affordable and secure housing.

In Tuesday’s budget, the Government also renewed its calls to build 1.2 million new homes by mid-2029.

It’s a figure experts have repeatedly warned will be missed at current housing completion rates, but one Housing Minister Julie Collins said was the “most lasting” fix to the shortage.

“We know that building homes is hard work,” she said.

“It won’t happen overnight.”

To help reach its 1.2 million target, the Government will bring ministers together to speed up planning reforms including streamlining approvals and finding more development-ready land.

A report from the Urban Development Institute of Australia delivered in November last year found that 14 per cent of land in Perth and Peel was “fundamentally constrained”.

Dr Chalmers said planning blockages were one of the “biggest challenges” to the economy and the country needed “all shoulders to the wheel”.

The Government will also continue making significant progress under the National Agreement on Closing the Gap, with $698.4m over four years for a 10-year remote housing agreement with the Northern Territory Government to reduce overcrowding and to improve housing quality.

Commonwealth Rent Assistance will also be boosted, with $1.9 billion over five years from 2023–24 (and $0.5 billion per year ongoing from 2028–29) to increase the maximum rates by 10 per cent from 20 September 2024 to help address rental affordability challenges for recipients.