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In its Mid-Year Economic and Fiscal Outlook 2023–24 (MYEFO) update, the federal government has revealed it has invested $6.5 billion to address housing supply and affordability in addition to the $10 billion invested in the Housing Australia Future Fund.
The funding has been secured for previously announced initiatives since the release of the 2023–24 budget that included the Social Housing Accelerator, additional funding to the National Housing Infrastructure Facility (NHIF), the New Homes Bonus, and the Housing Support Program.
The Social Housing Accelerator was announced in June 2023 that saw the government invest $2 billion in a one-off payment to state and territory governments, which is expected to deliver approximately 4,000 new and refurbished social homes across Australia.
According to the government, states have agreed to commit all funds provided by the Social Housing Accelerator by 30 June 2025, with completion of all new homes expected by 2028.
Furthermore, the $3 billion New Homes Bonus was allocated to incentivise states and territories to reach the “ambitious” target of 1.2 new homes (announced in August 2023) over five years from 1 July 2024, which would add an additional 200,000 homes above the target initially agreed under the National Housing Accord in 2022.
The $3 billion incentive is a “performance-based fund” for the states and territories that surpass their share of the original 1 million homes target.
The additional funding of $1 billion for the NHIF, administered by Housing Australia, will go towards enabling the NHIF to provide concessional loans and grants to support more social housing dwellings.
The remaining $500 million has been allocated for the Housing Support Program. The funding, provided over two years, is a “competitive grants program” open to local, state, and territory governments to produce and support necessary infrastructure to increase housing supply.
Reacting to the outlook, Master Builders Australia has applauded the government’s commitment to boosting housing supply, however, it has stressed that “all policy levers to tackle the housing crisis must be pulling in the same direction”.
Master Builders Australia chief executive Denita Wawn stated: “We know that one of the biggest challenges in tackling inflation and cost of living [are] from pressures in the housing market, including rental inflation.
“From social and community housing, rental properties to owner-occupiers, there is a common constraint – supply.
“The focus to solving the housing crisis is two-fold: getting inflation back under control, which will ease interest rates and fostering an environment conducive to investment and development.
“We’re pleased to see $6.5 billion in funding commitments made to improve housing supply and affordability.”
Inflation moderating but ‘still elevated’
The MYEFO stated that inflation, while still elevated and above target, has “fallen broadly” in line with expectations since the December 2022 peak, and is projected to return to the target band of 2–3 per cent within 2024–25.
Specifically, the government has forecast inflation to be 2.75 per cent in the June quarter of 2025.
Treasurer Jim Chalmers stated that the government is aware of the cost-of-living struggles and slowing economy.
“We are making welcome and encouraging progress in the fight against inflation,” Mr Chalmers said.
“We know many Australians are doing it very tough, but welcome and encouraging progress is being made when it comes to the fight against inflation and in the economy more broadly.”
Additionally, the government has forecast a deficit of $1.1 billion in 2023–24 in what it refers to as “an improvement of $12.8 billion since the 2023–24 budget”.
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