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Your Budget 2017-18

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Guaranteeing the essentials

Protecting and boosting the essential services Australians rely on

Reducing pressure on housing affordability

Championing the great Australian dream of home ownership

The Government is providing practical solutions across the entire housing spectrum; from Australians struggling to put a roof over their head through to older Australians looking to downsize.

Access to secure and affordable housing can improve education and health outcomes, increase workforce participation and reduce welfare dependency.

However, an extended period of price growth, particularly in Sydney and Melbourne, is creating pressure across the housing spectrum.

Potential first homebuyers are struggling to transition into home ownership and are staying in the rental market for longer. This has put upward pressure on rental prices.

As a result, households on lower incomes are finding it increasingly difficult to find affordable rental properties. This has led to longer waiting lists for public and community housing.

Improving housing affordability right across the housing spectrum must be a key objective for governments at all levels. There is no silver bullet. The response must be well targeted and coordinated.

A key factor behind rising prices in some major cities has been supply failing to respond to demand. A period of weak construction activity in the mid-to-late 2000s left these cities undersupplied, resulting in pent-up demand.

Despite record housing supply in recent years, more homes are needed for Australians. Not just for homeowners, but for renters, key workers such as nurses, teachers and police officers who can’t afford to buy or rent and those on lower incomes.

The current National Affordable Housing Agreement (NAHA) lacks accountability and transparency. Despite the Australian Government providing the States with over $9 billion since 2009, the NAHA has failed to achieve its objectives.

The Government is providing national leadership to work together with State and Territory governments to reduce pressure on housing affordability.

This Budget contains a comprehensive and targeted reform plan to improve outcomes across the housing spectrum.

A targeted and comprehensive plan

Unlocking supply

The Government will help boost the supply of housing and will encourage a more responsive housing market by:

  • Providing $1 billion to fund critical infrastructure, such as water infrastructure, that will speed up the supply of housing
  • Working with the States to deliver planning and zoning reform that speeds up development
  • Releasing suitable Commonwealth land, starting with Defence land at Maribyrnong in Melbourne, for housing development
  • Investing more than $70 billion from 2013-14 to 2020-21 on transport infrastructure across Australia
  • Specifying housing supply targets in new agreements with the States and Territories

Creating the right incentives

The Government is creating the right incentives to improve housing outcomes, including:

  • Helping first home buyers to save a deposit through voluntary contributions into superannuation
  • Reducing barriers to downsizing to free up larger homes for families
  • Improving the targeting of housing tax concessions
  • Strengthening the capital gains tax rules so that foreign investors pay their fair share of capital gains tax
  • Reforming foreign investment rules to discourage investors from leaving their property vacant
  • Supporting economic growth and jobs to boost real wages

Improving outcomes for those most in need

The Government will improve outcomes in social housing and homelessness by:

  • Requiring States and Territories to meet social and affordable housing targets under revised funding arrangements
  • Providing $375 million to give funding certainty to providers of homelessness services
  • Establishing a National Housing Finance and Investment Corporation to operate an affordable housing bond aggregator
  • Providing tax incentives to increase private investment in affordable housing

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