The Coalition have entered the housing debate with a bang and have exposed a very raw nerve in Prime Minister Anthony Albanese. 

The announcement by Peter Dutton and Michael Sukkar to fund $5 Billion in housing related infrastructure is a giant step in the right direction.

The Coalition has also taken a critical step to ease the steep rises in construction costs by announcing a moratorium on National Construction Code (NCC) changes for 10 years. This alone would make a massive difference to new housing costs.

The Coalition’s new housing policy unlocks private sector investment and is much more likely to deliver many more houses.  This is the economic gap that the Albanese Government has missed.

Funding housing related infrastructure unlocks private sector investment, so the Commonwealth gets a multiplier effect from its investment. Commonwealth spending boosts private investment resulting in many more privately owned homes.

It is not often that all the peak industry associations back a new policy statement from an opposition – but that is exactly what happened in response to Peter Dutton’s housing policy statement.

• Urban Taskforce Australia
• Australian Local Government Association
• Planning Institute of Australia (PIA)
• Civil Contractors Federation
• Housing Industry Association (HIA)
• Master Builders Australia (MBA)
• UDIA

All backed-in the announcement from Peter Dutton and Michael Sukkar. This is a massive endorsement from a sector which is struggling.  Prime Minister Albanese would do well to take note.

The Coalition announcement is smart policy which is based on industry advice. Urban Taskforce has repeatedly called for the Commonwealth to use the surpluses created by growing income tax receipts (generated in significant part by the massive boost in immigration) to support housing supply with grants to the states and local government.

To date, Labor has focussed its Housing Accord policy and funding attention entirely on dealing with the consequences of under supply, rather than the cause.  They are funding Band Aids but ignoring the cause of the crisis. If you don’t fix the market housing supply problem, the demand for social and affordable housing grows.

Keep the Housing Australia Future Fund

That said, funding should not be stripped from Housing Australia – as we are finally getting somewhere on affordable housing policy.

Private sector financiers, including the banks, along with institutional investors like superannuation funds, can participate in financing affordable housing at a discount rent to market via “availability payments” that come from the HAFF.

These payments are a top-up to cover the difference between the discounted rent offered to affordable housing tenants and the market rental price. This is a case where the Albanese Government IS effectively leveraging their investment (the “top up” through the HAFF) to provide affordable housing without the taxpayer funding the complete purchase price.

Subject to Housing Australia getting the money into the hands of the Community Housing Providers with speed, this has been the most effective thing the Albanese Government has done – but it is dealing with the symptoms of the crisis, not the cause.

Immigration number UP: Housing Approvals and new build Commencements DOWN

It is simply irresponsible to bring in migrants in such numbers but ignore the need for housing supply.  It was Jim Chalmers who hosted the Skills summit in August 2022, and the Urban Taskforce made what now seems a very familiar call.  On August 30, 2022, we responded to the summit with a media release stating:

It is beyond imaginable that Federal Labor thought that announcing the National Housing Accord with a bucket of money directed to Community Housing Providers through Housing Australia would, on its own, solve the problem.  But this is what they have done, and the numbers speak for themselves.

We thought we had a crisis in 2022, before the changes to immigration numbers and before the announcement of the National Housing Accord.

• According to the ABS (Seasonally adjusted numbers – all sectors all dwelling types) in the 12 months till August 2022 there were 195,506 new dwelling construction approvals nationally.
• In the 12 months to August 2024 this approvals number has dropped markedly to only 166,223.

Putting this in context, in order to meet the National Housing Accord targets, there needs to be 1.2 million new homes completed by June 30, 2029.  That equates to 240,000 per year across Australia.

To achieve 240,000 completed dwellings in a year, there needs to be about 20% more approvals a few years in advance of the target year to take into account the fact that construction takes time and some projects won’t commence because of concerns about construction and financing costs rendering many development consents unviable for development.

They talked about holding the states to account for improving their planning performance but have done nothing to make this happen.

We have a massive problem with market-based housing supply – and this has caused the need for more funding of social and affordable housing. It is important to follow the logic of this because it’s the logic that instructs the policy solution and the Coalition have gotten this one right.

The Greens have led Labor on Housing policy

Labor has been led by the nose, following the Green’s Max Chandler-Mather down the path of funding affordable and social housing while ignoring the cause of the problem. Labor’s been so spooked that they even dabbled with changes to negative gearing and CGT concessions for a damaging week or so. Labor has held out its “Help to Buy” scheme as a major housing policy initiative – but it’s nothing more than a foe debate with the Greens and the policy is simply a targeted demand stimulus measure which will bump prices up unless market housing supply is addressed.

There is a crisis in housing supply, and it is effecting people who typically vote Labor, the most. The Millennials who flocked to “Albo” in 2022 are turning their backs in disappointment. Rent increases caused by the supply crisis are a major driver in the cost-of-living disaster – another traditional Labor voting cohort turning away.  Ongoing inflation, kept high by housing costs, keep interest rates high.  Last week we heard that the housing supply crisis is having a major impact on birth rate.

It is ironic that the Minister, Hon Clare O’Neil, who, following the jobs and skills summit of 2022, boosted the economy with a flood of new migrants as the Home Affairs Minister, but left construction workers off the critical worker list, is now responsible for Housing.

Minister O’Neil should be camped outside the Treasurer’s office to convince him to back the Coalition policy and secure an immediate multi-billion-dollar injection into access roads, water, power and sewerage. Then you will see the private sector, the financiers and the investors come in and build the homes.

For both political and practical reasons, the best thing that the Albanese Government could do right now is simply match or better the Coalition commitment on housing related infrastructure funding.  If it makes the Prime Minister feel better, he can say he is taking advice from the Urban Taskforce rather than following Peter Dutton.

For so many reasons, it’s time that the Albanese Government called a reset on housing policy because the current policy course is simply not working.

Enjoying Sourceable articles? Subscribe for Free and receive daily updates of all articles which are published on our site

Want to grow your sales, reach more new clients and expand your client base across Australia’s design and construction sector?

Advertise on Sourceable and have your business seen by the thousands of architects, engineers, builders/construction contractors, subcontractors/trade contractors, property developers and building industry suppliers who read our stories across the civil, commercial and residential construction sector