Australia’s government has set its sights on prefabricated manufactured homes, as the Commonwealth attempts to ramp up activity in order to achieve national housing targets.

(above image: AI generated via Canva)

Unveiled on Tuesday night, the 2025/26 Federal Budget was a modest affair, with the Government facing fiscal constraints and being incentivised to save significant announcements for the upcoming federal election campaign.

Overall, the Treasury has forecast a budget deficit of $42.1 billion in 2025/26 or 1.5 percent of GDP. Across the five yeas to 2028/29, the budget forecasts a cumulative deficit of $179.5 billion.

As a result, net debt is expected to rise from $556.0 billion or 19.9 percent of GDP in 2024/25 to $620.3 billion or 21.5 percent of GDP in 2025/26.

Beyond that, net debt is expected to reach $768.2 billion or 23.1 percent of GDP in 2028/29.

In terms of building and construction, a key area of focus was housing.

In this area, the budget includes several preannounced initiatives.

First, the budget allocated $54 million to advance prefabrication efforts.

As part of this, $49.3 million will be offered to states and territories to invest in local programs which aim to expand the prefabrication and modular housing construction.

An additional $4.7 million with be used to develop a voluntary national certification process for offsite construction. The aim will be to streamline approvals in cases where suitable quality standards are met.

According to the Government, these investments will provide the sector with regulatory certainty and will help to develop advanced manufacturing capability and output by developing a sustainable pipeline of work.

The government will also pump a further $800 million into the Help to Buy Scheme – a shared equity scheme which assists eligible home buyers to purchase a property with a smaller deposit.

This will be used to expand the income and property value thresholds for scheme eligibility in order to enable more households to quality (see media release for details).

As well, the budget also includes the previously announced key apprenticeship program through which eligible apprentices in housing construction will receive up to $10,000 in incentive payments on top of their wage.

Other measures of relevance to the building and construction sector include:

  • Ongoing investment as part of the ten-year, $120 billion infrastructure investment program. Major projects include $7.2 billion for safety upgrades on the Bruce Highway in Queensland, $2 billion to upgrade Sunshine Station in Melbourne, $2.3 billion in projects for the growing Western Sydney region and $350 million to upgrade the Kwinana Freeway in Western Australia.
  • Up to $3 billion in equity to complete the rollout of the National Broadband Network.
  • A range of investment to support the Future Made in Australia program (see media release for details).
  • $1 billion to establish the Building Early Education Fund to support construction of 160 new or expanded early childhood education centres in under-served markets such as outer suburbs and regional areas.
  • A national licensing scheme for electricians.

Building industry lobby groups welcomed the measures but said that the budget did not go far enough to support the industry.

“Tonight, the building and construction industry was seeking a Budget that supports the very businesses who have the opportunity to boost economic growth, bring down inflation and build for all Australians,” Master Builders Australia CEO Denita Wawn said

“The Federal Government has made a range of sensible, modest measures that look to make inroads in tackling key challenges around labour shortages, infrastructure, and modern methods of construction.

“Unfortunately, the very businesses who are expected to solve the housing crisis have been left disappointed this evening with minimal support to bring down business costs, incentivise growth, and reduce regulatory barriers.”

Meanwhile, Jocelyn Martin, Managing Director of Housing Industry Association, said that the budget failed to deliver the structural reforms which are needed to unlock more housing supply.

“The Albanese government’s fourth Federal Budget provided a critical juncture to double down and pull out all stops to address the nation’s crippling housing crisis, but, yet again it was a case of focusing on small target solutions,” Martin said.

“It was pleasing to see boosting housing supply as one of the key policy areas for this Budget, but the polices announced have missed the mark on addressing the key structural reforms needed.”

 

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