The 2024-25 federal budget unveiled by Treasurer Jim Chalmers this week puts housing front and centre, with a $6.2 billion package of new initiatives aimed at boosting supply, improving affordability, and supporting Australians doing it tough in the current housing market. This new funding builds on over $11 billion in housing measures previously announced, bringing the government's total investment to $32 billion through its 'Homes for Australia' plan.

With this budget, the government is reaffirming its ambitious goal of building 1.2 million new homes over the next five years to ease the nation's housing shortage. While industry bodies applaud this target, some caution that more needs to be done to hit that mark by 2029. Nevertheless, the budget outlines a multi-pronged approach to chipping away at the housing deficit:

Social and Affordable Housing Boost

A major focus is increasing the pipeline of social and affordable housing for low-income and vulnerable Australians. The budget earmarks an additional $1.9 billion in concessional loans to community housing providers to construct 40,000 new dwellings in this category.

The government will also invest an extra $423 million into a new $9.3 billion National Agreement on Social Housing and Homelessness. Under this 5-year accord, the Commonwealth is doubling its funding for homelessness services to $400 million per year, which states and territories will be expected to match. While advocates welcome this commitment, some argue it still falls short of the direct investment required to make a meaningful dent in waitlists and homelessness.

A further $1 billion from the National Housing Infrastructure Facility will be redirected to crisis and transitional accommodation, particularly for women and children fleeing domestic violence. Although this isn't strictly new money, stakeholders acknowledge the critical need for more housing options for these at-risk groups.

Rental Assistance and Support for Renters

Renters struggling with soaring costs and record-low vacancy rates will see some relief in the form of a further 10% boost to Commonwealth Rent Assistance, benefiting nearly 1 million households. This $1.9 billion measure represents the first back-to-back increase to the payment in over 30 years. The maximum CRA rate will now have risen more than 40% since May 2022. However, advocates say this still isn't sufficient to pull low-income renters out of housing stress.

Unlocking New Housing Supply

On the supply side, arguably the biggest ticket item is a new $1 billion investment in state and local infrastructure needed to support residential development, such as connecting roads, sewers and utilities to new housing estates. This is on top of a previously announced $500 million infrastructure program. The Property Council hailed this "enabling infrastructure" as key to accelerating new construction.

The budget also puts pressure on universities to boost their supply of dedicated student accommodation. New regulations will tie the number of international students a university can enrol to the amount of housing it provides for its students. The aim is to reduce pressure on the private rental market in areas with large student populations. While the principle was welcomed, some questioned the feasibility and fairness of the plan.

Growing the Construction Workforce 

To realise the government's home-building target, the budget acknowledges the need for a larger skilled construction workforce. It allocates $90 million to expand access to fee-free TAFE and VET courses in construction-related fields, potentially creating up to 20,000 new training slots. Funding will also go towards streamlining skills assessments to bring in more qualified migrants to fill workforce gaps. A new Building Women's Careers Program seeks to improve gender diversity in the traditionally male-dominated sector.

While these measures were positively received by the industry, Master Builders Australia stressed that further planning and industrial relations reforms were still needed to hit the 1.2 million home mark on schedule.

Overall, this year's budget reflects the government's concerted push to improve housing affordability and access across the spectrum, from homelessness services through to the private market. The $6.2 billion in new funding and $32 billion in total investment are substantial steps in the right direction, even if advocates argue there is further to go. As the Treasurer himself acknowledged, reaching the ambitious home-building goal will require sustained coordination and commitment from all levels of government and the housing sector. But for the countless Australians feeling the acute pain of the housing crisis, this budget offers some genuine hope of relief.

Infrastructure

As part of its broader housing affordability strategy, the 2024-25 federal budget is placing a strong emphasis on infrastructure investment to support residential development and economic growth across the nation.

Headlining the infrastructure package is a commitment of $16.5 billion over the next decade for a mix of new and existing projects in every state and territory. Treasurer Jim Chalmers underscored the link between housing supply and infrastructure, noting that "building new homes meant building new connections to communities as well."

New Infrastructure Projects ($4.6 billion)

The government is funding 69 new infrastructure initiatives to the tune of $4.6 billion. The lion's share ($1.9 billion) is earmarked for road and rail projects in Western Sydney, a rapidly growing region that has been grappling with congestion and connectivity challenges as its population booms.

Western Australia will receive $300 million to expand its Metronet public transport system, which has been progressively transforming Perth's transit network since 2016. The new funding will help extend the reach and frequency of rail services to growing suburban areas.

In Queensland, $177 million has been allocated for upgrades to bridges and intersections along the critical Warrego Highway, which serves as a major freight route connecting the state's agricultural regions to the Port of Brisbane.

While these big ticket items grabbed headlines, the new infrastructure funding will be spread across projects both large and small in every corner of the country, from upgrading regional roads to improving accessibility of public transport hubs.

Investing in Existing Infrastructure ($10.1 billion)

In addition to the new projects, the budget is topping up funding for a number of existing infrastructure works to the tune of $10.1 billion.

Melbourne's planned East West Link, a controversial cross-city tunnel aimed at easing congestion, will receive a further $3.25 billion to progress the project. The Victorian government had previously scrapped the East West Link in 2014 but later revived it, with the federal government now supporting its development as part of Victoria's long-term infrastructure pipeline.

Queensland's Sunshine Coast is set to benefit from an additional $1.15 billion for construction of a new rail link to better connect the fast-growing region to Brisbane. The project, which includes a 40km new passenger rail line and stations between Beerwah and Maroochydore, is expected to support over 9,000 jobs and boost the local economy by $5.6 billion.