Australian Government Plans to Build One Million New Homes Under Ambitious Plan

Treasurer Jim Chalmers at a press conference at Parliament House in Canberra, Australia, on July 20, 2022. (AAP Image/Mick Tsikas)

The Australian government will reveal its ambitious plan to build more affordable housing when its first budget is delivered on Tuesday night.

Treasurer Jim Chalmers confirmed he was working with state and territory governments, the building industry, and superannuation funds to build one million new homes.

During its election campaign, the government already pledged 30,000 social and affordable housing in five years under its $10 billion Housing Australia Future Fund. The newest plan will be inclusive of all housing policies.

“We believe we need an ambitious target for affordable homes. I don't think anybody in Australia thinks the housing market is working as it should, particularly for people who want to live near where they work. And so that's a big focus of ours,” he told ABC radio.

Chalmers said building more affordable housing to allow people to live near job opportunities, including newly created ones, was one of the “big challenges of the economy.”

“I've spent a lot of time working on this over the course of the last few months ... and we'll see the fruits of that tonight,” he said.

A resident stands on a balcony of a public housing apartment in Redfern in Sydney, Australia, on Sept. 16, 2021. (Lisa Maree Williams/Getty Images)

Shadow Treasurer Angus Taylor agreed that Australia needed more housing supply but did not want to see superannuation being used to achieve it.

“Superannuation is there for people's retirement, a nest egg that they can rely on so that they can have a prosperous retirement, and we don't want to see governments using that money as though it is theirs for their projects,” he told reporters on Tuesday.

According to documents by the Reserve Bank of Australia (RBA), released under Freedom of Information, Australia’s housing market is expected to drop up to 20 percent by the end of 2024.

“We’re now anticipating housing prices to decline over the next few years. That reflects the ongoing slowing in momentum in the market and the steepening of expectations for the future path of interest rates,” an RBA economist said in the document, according to the Sydney Morning Herald.

Albanese Government’s First Budget

Taylor said the budget would be Labor’s “first big test” as government and a test of whether it would be able to deal with the challenges such as the rising cost of living and cost of doing business.

“We want to see a successful budget, but ultimately, the test for Labor is whether they have that clear and comprehensive plan to deal with those pressures Australians are facing,” he said.

Labor has been under pressure to scrap its election promise to continue forward with stage three tax cuts, which would abolish the 37 percent tax bracket and lower the 32.5 percent tax bracket to 30 percent.

Stage one and two tax cuts were already delivered under the previous Liberal-National Coalition government, which targeted lower and middle income-earners.

“We want to see a budget that ensures that Australians are paying their fair share, but no more than their fair share and having the vast majority of Australians keeping 70 cents in the dollar,” Taylor said.

“That is a way forward for a prosperous, active economy where people are investing in their jobs, their careers, their businesses; that's what we want to see.”

Shadow Treasurer Angus Taylor at a press conference at Parliament House in Canberra, Australia, on Feb. 17, 2022. (AAP Image/Mick Tsikas)

Chalmers told ABC News on Sunday that, faced with inflation challenges, the government’s responsibility was not to “spray money around” in an untargeted way.

He acknowledged that the cost of the National Disability Insurance Scheme was rising, but it was one of the schemes that the budget needed to create room for.

“At the same time, [we need to] make it as efficient as possible,” he said.

Health and aged care spending is also expected to increase to $548 billion over the next four years, putting major pressure on the budget.

Alongside health, aged care, and disability services, defence spending is also expected to make up a significant portion of the budget.

The budget will be delivered in Parliament by Chalmers at 7:30 p.m. on Tuesday.