Budget overview
This Budget is the next stage in the Government's economic plan, building on commitments from the 2016-17 Budget and the 2016 election.
Reducing pressure on housing affordability
Addressing housing affordability is a critical economic and social issue
Access to affordable and secure housing is critical for improving employment, education and health outcomes for Australians.
Despite record housing supply in recent years, a decade of subdued investment from the early 2000s had led to pent-up demand in some major cities.
An extended period of house price growth, particularly in Sydney and Melbourne, has resulted in young families delaying the purchase of their first home. These families are staying in the rental market for longer, adding pressure further down the housing spectrum on Australians waiting for affordable and social housing.
Since 2008, the Commonwealth has provided over $9 billion in payments to the States and Territories under the National Affordable Housing Agreement. There has been too little accountability for this spending and social housing stock has stagnated.
In this Budget, the Government is taking action to ensure Australians have more opportunities to own their own home or have access to affordable rental accommodation.
However, there is no silver bullet to solving housing affordability. The Government’s plan to reduce pressure on housing affordability is a careful, calibrated and comprehensive response that will improve outcomes across the housing spectrum.
Government action must be responsive to evolving conditions in housing markets. That is why we are giving new powers to the Australian Prudential Regulation Authority to respond flexibly to financial and housing market developments that pose a risk to financial stability.
The Government’s comprehensive, targeted plan will:
- unlock supply,
- create the right incentives, and
- improve outcomes for those most in need.
A comprehensive plan for all Australians
Affordable housing for all Australians
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 reforms that speed 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 address 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 new tax incentives to increase private investment in affordable housing.