A new $5 billion infrastructure fund and a 10-year freeze on further changes to the National Construction Code will form part of the Coalition’s plan to address Australia’s housing affordability challenges.

On Saturday, Opposition Leader Peter Dutton joined with housing spokesman Michael Sukkar and infrastructure spokeswoman Bridget McKenzie to launch the Coalition’s housing policy pitch to voters at next year’s election.

The key plank of the new policy will be a $5 billion infrastructure fund that the Coalition says will unlock up to 500,000 new homes across greenfield sites.

Set to operate over four years, the fund will provide a mix of grants and concessional loans to accelerate provision of shovel-ready infrastructure for new greenfield development projects.

The grants will be available to local government, state and territory owned utility providers, property developers and special purpose vehicles.

Funds will be available for construction of water, power, sewerage and access roads.

The grants and loans will be offered on a ‘use it or lose it’ basis, with funding set to be terminated on projects where there is a lack of progress within twelve months of contracting.

In addition, the Coalition says that it will introduce a 10-year freeze on further changes to the National Construction Code (NCC).

This follows significant changes to the Code in 2022 that included the introduction of accessible housing requirements and a significant increase in energy performance requirements for new homes.

(No details about what the 10-year freeze would entail were provided. However, it is likely that the announcement would simply mean that there will be no significant stringency upgrades to energy performance requirements of the Code. It is likely that any amendments to the Code which are made during each three-year updating cycle will focus upon modest and technical Code amendments and would not either increase the stringency of performance requirements or create any material regulatory burden.)

The latest announcement comes as housing is shaping up to be a significant battleground in the Federal election next year.

As part of its objective to work with states and territories to meet the national housing target of delivering 1.2 million new homes over the five years from 1 July 2024 under the National Housing Accord, the Government is undertaking a number of actions.

These involve investment in public and social housing, incentives and support for states and local governments to deliver new housing and support for first home buyers.

In particular, government efforts have included:

• establishment of the $10 billion Housing Australia Future Fund Facility (HAFF) to support the delivery of 20,000 new social homes and 10,000 new affordable homes.
• $3.5 billion in payments to state and local governments to support and incentivise delivery of new homes toward the National Housing Accord target.
• A one-off $2 billion Social Housing Accelerator payment to states and territories to deliver a permanent increase in social housing.
• Support for first-home buyers such as the Commonwealth Help to Buy Scheme. If the legislation to support this scheme is passed into law (the legislation is currently stalled in the Senate), the government will co-purchase homes with around 40,000 first home buyers.

In addition to the newly announced infrastructure program and freezing of NCC changes, meanwhile, the Coalition has also previously pledged to free up more than 100,000 homes over five years by slashing migration, imposing a two-year ban on foreign investors and temporary residents purchasing existing homes, and capping overseas student numbers.

A key difference between the current Labor Government’s incentive and support payments and the Opposition’s infrastructure facility is that the Coalition will provide funding to state-owned utility companies rather than directly channeling money to state/territory governments.

Announcing its changes, the Coalition said that the focus on enabling infrastructure had come after extensive consultation with local government had revealed that a lack of funding for critical infrastructure is often a key bottleneck which holds up new home creation.

It says the program focuses on detached housing as this – according to the Coalition – is the least expensive means by which to deliver new homes.

As for the freezing of new NCC changes, it says that industry estimates have estimated that the 2022 NCC changes have added $60,000 to the average cost of a new home (albeit with higher energy performing homes being cheaper to run).

Building industry lobby groups have welcomed the announcement.

“This is smart policy that goes right to the heart of addressing the housing crisis and ensuring there are poles, pipes, wires and roads so houses can actually be built,” said Col Dutton, National President of the Urban Development Institute of Australia.

Based on UDIA analysis, Dutton estimates an average shortfall for enabling infrastructure of around $10,000 per dwelling nationwide after taking account of the contributions and allocations that are already earmarked for infrastructure.

On this basis, he says that the fund could unlock up to 100,000 houses for every $1 billion in the fund (or 500,000 homes for the $5 billion fund as estimated by the Coalition).

Nicholas Proud, CEO of the Civil Contractors Federation of Australia, agreed about the importance of infrastructure provision as an enabler of new housing.

“You cannot spend a dollar on housing until you spend a dollar on housing enabling civil infrastructure,” Proud said.

“This simply means that water, sewerage, energy, roads, subdivisions must come first for new housing estates, and infrastructure capacity upgrades are required in brownfield areas.

“It is a major reason housing supply is at decade lows.

“Housing commencements having dropped from 217,000 home starts in the year to December 2021 to 158,000 starts in the year ending September 2024 and whilst many other forms of stimulus have been tried, housing enabling civil infrastructure will be key to unblocking housing supply pipelines and unlocking doors.

“The cost of infrastructure when it is built simply gets handed down the line to the people who can least afford it – our kids and low-income earners.

“This policy is not new, but it is highly effective. Post World War 2, governments competed to provide housing enabling infrastructure to attract migrants and to make housing creation simple and less costly, since that time we have shifted infrastructure costs onto the end consumer.

“The last kilometre of housing enabling civil infrastructure is a major cost, it causes disputes blocking activation of land and infill development.

“This supply blocker and affordability barrier cost can be offloaded from those looking to purchase a home and this $5b housing enabling infrastructure policy which seeks to open up housing options is a major missing link to why homes starts have collapsed and how housing can be recommenced.

“You cannot spend a dollar on housing until you spend a dollar on housing enabling civil infrastructure.

“This simply means that water, sewerage, energy, roads, subdivisions must come first for new housing estates, and infrastructure capacity upgrades are required in brownfield areas.

“It is a major reason housing supply is at decade lows.

“Housing commencements having dropped from 217,000 home starts in the year to December 2021 to 158,000 starts in the year ending September 2024 and whilst many other forms of stimulus have been tried, housing enabling civil infrastructure will be key to unblocking housing supply pipelines and unlocking doors.

“The cost of infrastructure when it is built simply gets handed down the line to the people who can least afford it – our kids and low-income earners.

“This policy is not new, but it is highly effective. Post World War 2, governments competed to provide housing enabling infrastructure to attract migrants and to make housing creation simple and less costly, since that time we have shifted infrastructure costs onto the end consumer.

“The last kilometre of housing enabling civil infrastructure is a major cost, it causes disputes blocking activation of land and infill development.

“This supply blocker and affordability barrier cost can be offloaded from those looking to purchase a home and this $5b housing enabling infrastructure policy which seeks to open up housing options is a major missing link to why homes starts have collapsed and how housing can be recommenced.”

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