Federal Budget 2024: $6.2b housing splash
- May 15, 2024
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The federal government has unveiled $6.2 billion in new housing spending in this year’s budget, with a major focus on housing for Aussies doing it tough.
With near record low vacancy rates nationally and an increasingly ambitious housing target of 1.2 million new homes, the $6.2bn package aims to unlock more affordable housing, ease up infrastructure bottlenecks and boost student housing all without fuelling inflation.
Delivering the budget, Treasurer Jim Chalmers doubled down on the government’s housing target.
“In the five years from this July, we aim to build 1.2 million of them. Our goal is ambitious but achievable, if we all work together and if we all do our bit,” Dr Chalmers said in his budget speech.
“[The] $6.2 billion in new investments mean our $32 billion Home for Australia plan will clear local infrastructure bottlenecks, provide more housing for students, fund more social and affordable housing, and we will also deliver better transport for better access to suburbs, cities and regions.”
The new investment includes $1.9 billion in government-backed loans for social and affordable housing, as well as an extra $1 billion to help the states and territories deliver new housing infrastructure.
The government will invest $1.9 billion into a 10% boost for Commonwealth Rent Assistance to help renters, as well as almost $843 million to improve remote housing in the Northern Territory.
It will allocate an additional $423 million towards the national agreement on social housing and homelessness, in addition to nearly $89 million for construction workforce training.
The new $6.2bn package adds to the more than $11.3 billion in housing measures already announced last week, although some of those initiatives were repurposed funding and joint funding agreements with the states and territories.
PropTrack senior economist Paul Ryan said the government’s policy changes focused on unlocking housing supply to reduce housing costs.
“The government faces a difficult challenge in making housing more affordable,” Mr Ryan said.
“This is a key issue given Australians are facing record-low housing and rental affordability.”
Here’s what’s included for housing in the 2024-25 federal budget:
Rent assistance
Nearly one million households will benefit from a 10% boost to Commonwealth Rent Assistance (CRA).
The government increased the maximum rate of CRA by 10% at a cost of $1.9 billion over five years.
It builds on the 15% CRA boost in last year’s budget. The CRA maximum rate has increased by more than 40% since May 2022 as a result of indexation and the government’s boosts.
“Rising rents are another big part of the inflation challenge, and we’re supporting renters who need our help,” Dr Chalmers said.
“It’s the first back-to-back increase to Commonwealth Rent Assistance in more than 30 years and more much-needed help for young people and renters of all age doing it tough.”
Housing infrastructure
To boost the supply of new housing, the government has focused on housing infrastructure and social and affordable housing measures.
The government will provide the states and territories with a further $1 billion to deliver new housing infrastructure including roads and connecting essential services.
It follows the $500 million that the government previously committed through the Housing Support Program.
Social and affordable housing
The government will provide additional concessional loans worth up to $1.9 billion for community housing providers and other charities to support the delivery of new homes.
The additional financing will support the delivery of the 40,000 social and affordable housing under the Housing Australia Future Fund (HAFF) and Housing Accord.
The government will invest an additional $423 million into a new five-year, $9.3 billion National Agreement on Social Housing and Homelessness.
Under the agreement, the federal government will double its funding for homelessness services – funding that the states and territories will have to match.
Mr Ryan said the national agreement was a continuation of an existing policy, however the federal government had tipped in additional funding, with the expectation that the states would match it.
“Given the housing crisis has been particularly acute for lower-income earners, and the blow-out in wait times for social and affordable housing, this will hopefully provide some easing to a sector facing a challenging environment,” Mr Ryan said.
The government will also repurpose $1 billion under the National Housing Infrastructure Facility (NHIF) to put towards crisis and transitional accommodation for women and children experiencing domestic violence.
Last week, the government described the crisis and transitional accommodation funding as new spending, however treasury officials confirmed that the funding was redirected from existing NHIF funds.
“Tonight’s budget delivers an additional $1.9 billion in loans to help build 40,000 social and affordable homes,” Dr Chalmers said.
“We have also secured the national housing agreement, which would have otherwise run out.
Resource: realestate.com.au