Budget 2024: Tradies set to cash in as Albo pledges $11.3billion to build social and affordable homes

The Albanian government will unveil an $11.3 billion housing package, mainly aimed at boosting the supply of social and affordable housing, as the centerpiece of its May 14 budget.

In a tacit admission that its efforts to alleviate Australia’s acute housing crisis had not been enough, Labor will inject billions of dollars in additional funding to help accelerate new supply, combat homelessness and help those fleeing domestic violence with crisis accommodation.

Unveiling the announcement after a National Cabinet meeting on Friday evening, Prime Minister Anthony Albanese said Labour’s ‘Homes for Australia’ plan would keep the Australian dream of home ownership within reach.

“This budget means more tradies, fewer barriers to construction, less talk and more houses,” Albanese said.

“This isn’t about one suburb, one city or one state. It is a challenge facing Australians around the world and action is needed from every level of government.”

The lion’s share of the package will consist of $9.3 billion in new funding to deliver the new five-year National Agreement on Social Housing and Homelessness, with support to be administered by state and territory governments.

The states and territories will cumulatively represent a doubling of federal homelessness funding to $400 million per year, and will be cumulatively needed to meet increased Commonwealth spending dollar for dollar, boosting crisis support and social housing supply stepped up.

In addition, $1 billion will be spent on crisis and transition services for families and children in violent circumstances, as voters demand the Labor government plays a greater role in eradicating family and domestic violence.

Prime Minister Anthony Albanese said Labour’s ‘Homes for Australia’ plan would keep the Australian dream of home ownership within reach

The commitment includes increasing the share of grants for this investment to $700 million, up from a previous $175 million, for running accommodation services.

States and territories will also benefit from an additional $1 billion for road, energy and other supporting infrastructure to support the construction of new homes.

Federal Treasurer Jim Chalmers said the substantial investment, which will be fully explained on Tuesday evening, would help support the construction of new homes.

“We are budgeting billions of extra dollars to build more homes across the country because we know we need to increase supply to tackle this housing problem,” Dr Chalmers said.

New legal requirements will also be imposed on the tertiary education sector, requiring universities to increase their range of student accommodation for domestic and international students.

“We need more purpose-built homes to support students in higher education and that is what these reforms, developed in consultation with the sector, will help drive,” Education Secretary Jason Clare said.

States and territories will also benefit from an additional $1 billion for road, energy and other supporting infrastructure to support the construction of new homes

Amid rising rents, record low vacancy rates and rising house prices, fueled in part by weak housing activity and surging international arrivals, voter dissatisfaction has been fueled and demand has increased for governments to address the cost and availability of housing to grab.

The government’s own ‘State of the Housing System’ report, published earlier this month, laid bare the challenges Labor faced in meeting its own targets under the National Housing Agreement.

To meet the objectives of the agreement, 1.2 million well-located homes will need to be built in the five years to 2029, which equates to a rolling annual average of housing completions of 240,000.

But in its report, the National Housing Supply and Affordability Council found that the government is at risk of missing its target and falling 40,000 homes short of the ultimate target.

According to the latest measurements, the number of building permits, a leading indicator of Australia’s housing pipeline, has fallen to just 162,649 in the year to March 2024 – around 77,000 short of the level needed to meet the target.