26 October 2022
With Labor’s Federal Budget handed down this week, there is plenty in it for real estate.
In a Budget that has been described by Treasurer Jim Chalmers as “solid and sensible”, this Budget aims to relieve cost of living pressure while trying to improve Australia’s housing affordability crisis. There is a five-point plan to tackle cost of living relief, including cheaper childcare, expanding paid parental leave, cheaper medicines, more affordable housing and getting wages moving again.
When it comes to property, the announcement of a new National Housing Accord between governments, investors, and industry “to build the affordable homes our country desperately needs, and to help tackle our housing crisis.” On top of its existing commitments, the government will provide $350million over five years to deliver 10,000 affordable dwellings. “This will be delivered through an ongoing funding stream to help cover the gap between market rents and subsidised rents, making more projects commercially viable,” Mr Chalmers said.
“State and territory governments will build on our commitment with up to 10,000 new homes as well. That’s up to 20,000 new affordable homes in total.” This is in addition to the 30,000 new social and affordable housing dwellings delivered through the Housing Australia Future Fund as mentioned below.
“The ambition of this Accord is big and it’s bold – an aspiration to build one million new, well-located homes over five years from 2024,” he added. He says that while most of the supply needs to come from the market, he expressed his belief that there is a role for Government, and they intend to play a leading role.
The Government is also establishing the $10billion Housing Australia Future Fund, to be managed by the Future Fund Management Agency. The Fund will help build 20,000 new social housing dwellings, 4000 of which will be allocated to women and children who are victims of family and domestic violence and older females at risk of homelessness. A further 10,000 new affordable houses will be built for those including frontline workers.
Also on the Government’s housing agenda is encouraging more older Australians to downsize their homes, freeing up stock for younger families. Budget documents outline that the Government plans to extend the exemption of home sale proceeds from asset testing from 12 months to 24 months. This move will allow pensioners more time to purchase, build or renovate a new home before the pension is affected and will also see the Government expand access to downsizer superannuation contributions for people aged 55-59.
Further, the Government also announced a $46.2 million measure to help current and former ADF personnel purchase their home through the Defence Home Ownership Scheme. This will support veterans and ADF personnel to purchase a home through monthly subsidies on mortgage interest payments.
The Government also doubled down on previously announced schemes, such as the Help to Buy Scheme which will see $326.4 million spent over four years giving eligible home buyers access to an equity contribution to buy a home with a smaller deposit and a smaller mortgage.
Also previously announced, the Regional First Home Buyer Scheme will assist 10,000 eligible regional first home buyers a year to buy a home by guaranteeing up to 15 per cent of the purchase price, with a deposit as low as 5 per cent.
Other non-property related measures include:
Cost-of-living relief
- $4.7 billion over four years to deliver cheaper childcare for 1.26 million families.
- $531.6 million over four years to expand Paid Parental Leave to 26 weeks by 2026.
- $787.1 million over four years to reduce the general patient co-payment for treatments on the Pharmaceutical Benefits Scheme from $42.50 to $30 per script.
- Supporting wage increases for our lowest paid workers and getting wages moving again.
A stronger, more resilient economy
- Delivering 480,000 fee-free TAFE places and a $50 million TAFE Technology Fund to modernise TAFEs.
- Providing 20,000 additional university places for disadvantaged Australians.
- $474.5 million over two years to support student wellbeing and improve classrooms.
- Supporting women’s workforce participation and advancing gender equality.
- Boosting the Work Bonus income bank to give older Australians the option to work and keep more of their pension.
- A Powering Australia Plan to drive investment in cleaner, cheaper energy, including $20 billion of low-cost finance under Rewiring the Nation to upgrade our electricity infrastructure.
- Acting on climate change and a $1.8 billion investment in strong action to protect, restore and manage our precious natural environment.
- Up to $200 million per year on disaster prevention and resilience initiatives through the Disaster Ready Fund, as well as additional funding for flood affected communities and extra staff to quickly get Australians the support they need.
- Establishing the $15 billion National Reconstruction Fund to support a future made in Australia.
- More than $120 billion of investment in transport infrastructure over the next 10 years.
- $2.4 billion in NBN Co to extend fibre access to 1.5 million more premises and $1.2 billion for the Better Connectivity for Regional and Rural Australia Plan.
- Protecting our farmers from pests and diseases such as foot-and-mouth disease.
Budget repair
- $28.5 billion in Budget improvements, including spending reductions, re-prioritisations and strengthening the fairness and integrity of the tax system.
- Returning 99 per cent of upgrades to tax receipts to the Budget and offsetting nearly all policy decisions across this year and next.
- $235 million to commence the rollout of Urgent Care Clinics and $750 million set aside for the Strengthening Medicare Fund.
- New investment of $3 billion to deliver better aged care.
- Preparing for the referendum to enshrine a First Nations Voice to Parliament in the Constitution.
- Begins the task of restoring the NDIS and securing its future.
- $1.7 billion over six years to support women’s safety.
- Deepening relationships with our Pacific family and across our region.
- Equipping Defence to respond to global and regional security challenges, with funding for Defence rising to more than two per cent of GDP over the forward estimates.
- Ensuring the integrity and security of Australia’s borders.
- Establishing a National Anti-Corruption Commission to restore trust and integrity in government.
Mr Chalmers said the Budget was an investment in a “stronger, more resilient, more modern economy”. “It provides cost of living relief, which is responsible, not reckless, to make life easier for Australians without adding to inflation.”
