Housing measures

Budget Review October 2022–23 Index 

Matthew Thomas and Elliott King

Housing for the most vulnerable has remained a persistent issue in Australia for decades. In recent years increasing housing costs have become a problem for more people; there are housing supply and affordability issues across the entire housing continuum, from crisis housing to home ownership.

Disasters which have devasted regional communities in the last few years have highlighted the absence of emergency housing for people rendered homeless by natural disaster, or by other abrupt changes in their personal circumstances. There is insufficient social housing stock to meet the present and projected need of low-income households unable to afford or access suitable accommodation in the private rental market. This is especially so in regional and remote Indigenous communities, where overcrowding is common and the quality of housing frequently poor. The latest house price boom, which began in late 2020, has seen the prospects of home ownership deteriorate for many, particularly would-be young home purchasers, in both the capital cities and regional centres.

The drivers behind Australia’s housing crisis are highly complex and Australia’s housing problems are unlikely to be resolved without coordinated action across the three tiers of government, and the involvement of the construction sector and private investment in the design and implementation of policy responses.

In the lead up to the Federal Election the Government signalled its intention to establish a framework for tackling housing affordability problems over the longer term. To this end the Budget contains the following measures:

  • $13.4 million over 4 years to develop a 10 year National Housing and Homelessness Plan in 2023
  • $15.2 million over 4 years and $4.4 million per year ongoing to establish a National Housing Supply and Affordability Council
  • $0.5 million over 4 years and $0.1 million per year ongoing to establish Housing Australia and
  • $8.3 million over 4 years for the administration of a newly created Housing Australia Future Fund (HAFF).

The Budget also includes measures to respond to acute housing needs. It should be noted that these measures, listed below, are to be funded using returns from $10.0 billion invested in the off-budget HAFF.

Over the first 5 years returns from the HAFF are intended to fund:

  • 20,000 social housing properties – 4,000 of which are to be ‘allocated for women and children fleeing domestic and family violence and older women on low incomes who are at risk of homelessness’
  • $200.0 million for the repair, maintenance and improvements of housing in remote Indigenous communities
  • $100.0 million for crisis and transitional housing options for women and children fleeing domestic and family violence, and older women on low incomes who are at risk of homelessness and
  • $30.0 million to build more housing and specialist services for veterans who are experiencing homelessness or who are at risk of homelessness.

The Budget also provides funding to assist some people to purchase a home:

  • $324.6 million over 4 years to establish the Help to Buy shared equity scheme for low to moderate income earners and
  • redirects funding from the previous Government’s Regional Home Guarantee to establish a new Regional First Home Buyer Guarantee, under which first home buyers in regional areas will be supported to purchase their home with a minimum 5% deposit (see the Library’s previous Budget Review article for background and comment on the Government’s loan guarantee arrangements)

This brief largely examines the changes to the Commonwealth’s role in housing policy announced in the lead up to the Federal Election and enabled by the Budget, and the HAFF.

Current regulatory settings

A high-level overview of policy levers available across the levels of government is set out in Figure 1. Generally speaking, the Commonwealth does not hold responsibility for the main policy levers that directly impact housing provision, but it does control many of the levers which influence housing demand (as discussed in the Parliamentary Library’s Briefing Book article Housing Market Interventions). As Figure 1 shows, most of the Commonwealth’s interventions are focussed on the demand side of the housing market.

Diagram - showing housing policy levers of Federal, state and territory and local governments 

Source: Australian Housing and Urban Research Institute (AHURI), ‘Understanding the housing policy levers of Commonwealth, state and territory, and local government: an overview of demand and supply side policy levers’, AHRUI website, 27 September 2018.

The need for a housing plan

As noted above, the Budget provides funding for a number of measures that establish the basis for a more comprehensive and collaborative approach to housing policy in Australia. Housing experts and other key stakeholders in the housing sector have been calling for the Commonwealth Government to develop an overarching, long-term national housing strategy, or plan, for some time. The Budget signals that the Government intends to become more involved in other aspects of the housing system, particularly housing supply.

Previous attempts at a plan

Arguably, there have been two main previous attempts to develop a national program of housing policy reform in Australia. The first of these was the Chifley Government’s appointment of an investigatory body—the Commonwealth Housing Commission (CHC)—to assess the state of Australia’s housing stock and its post-war housing requirements. The second was the National Housing Strategy (NHS) which was commissioned by the Keating Government in 1990 and reported in 1992. (Patrick Troy, Accommodating Australians, (Sydney: The Federation Press, 2012)).

Of these attempts, the CHC appears to have had the more demonstrable impact, in part because it contributed to the development of the earliest Commonwealth-State Housing Agreement (CSHA) in 1945. Since 1945, Australian Governments have introduced housing policy initiatives and, along with state and territory governments, provided funding for housing and homelessness services through the CHSA and subsequent iterations of this Agreement (Troy, Accommodating Australians, pp. 104–235).

Current arrangements

Instead of a national housing plan, Australia currently has in place the National Housing and Homelessness Agreement (NHHA). This is an on-going compact that is subject to a five-year review and may be amended as necessary by agreement of the parties.

In August 2022, the Productivity Commission published the findings of its scheduled review of the NHHA. The Commission was highly critical of the Agreement, arguing that it is ineffective in fostering intergovernmental collaboration and enabling nationally important reforms.

The Plan and the Agreement

In the context of the 2022 Federal Election, the Labor Government committed to the development of a National Housing and Homelessness Plan that would ‘set out the key short, medium and longer term reforms needed to make it easier for Australians to buy a home, easier to rent, and put a roof over the heads of more homeless Australians’.

The Government also pledged to establish a National Housing Supply and Affordability Council (NHSAC) that is intended to play a key role in the development and implementation of the Plan, and ‘ensure the Commonwealth plays a leadership role in increasing supply and improving housing affordability’. Based on publicly available information, it is not yet clear if the NHSAC will operate in the same manner as the former National Housing Supply Council.

The Budget provides funding for the establishment of both the NHSAC, and Housing Australia, in which it is to be housed. Housing Australia is to be created through renaming and expanding the remit of the National Housing Finance Investment Corporation (NHFIC).

The Plan is to be developed ‘with the support and assistance of key stakeholders including States and Territories, local government, not for profit and civil society organisations, industry bodies, superannuation funds and other experts in housing, finance and urban development’. It is not clear at this stage whether the Plan is to be enshrined in legislation.

Housing policy researcher Hal Pawson has expressed some reservations with regard to the Budget and what he sees as its undue focus on the supply side of the market to the exclusion of policy settings that impact on demand, such as migration, tax, social security and financial regulation. In his view, ‘It would be hoped the more holistic analysis of Australia’s housing problems and solutions that’s essential to address these issues will underlie the government’s forthcoming National Housing and Homelessness Plan’. Pawson is concerned that the Plan should not be focused exclusively on homelessness and affordability at the lower end of the market, as examining these aspects in isolation ‘risks misdiagnosis and the prescription of palliative solutions’.

The NHHA was due to expire no later than 30 June 2023 but has been extended for one year ‘to allow for the development of the new arrangement, in consultation with the National Housing Supply and Affordability Council and states and territories’ (Budget measures: budget paper no. 2: October 2022–23, p. 183). This implies that the new arrangements will be in line with the Productivity Commission’s suggestion that the Plan ‘should be the overarching document, and the narrower Agreement the key avenue for implementing parts of the Plan’ (p. 160).

National Housing Accord

In keeping with its shift towards a broader and more cooperative approach, the Government has developed a National Housing Accord 2022 with state and territory governments, the Australian Local Government Association (ALGA), institutional investors including superannuation funds, and residential development, building and construction industry representatives. The Accord sets out immediate actions, commitments and areas for further work, with a view to increasing ‘quality, affordable housing supply over the medium term’. (NHA, p. 1). The Accord will be administered by NHFIC and ‘complements the Government’s investment in the [HAFF]’ (Budget paper no. 2, p. 189).

Under the Accord, the Government has set ‘an initial, aspirational national target of one million new, well located homes over 5 years from 2024’ (NHA, p. 1). There is some contention as to whether this is an attempt to take credit for the anticipated growth of housing, or if the residential construction sector will be able to supply that many dwellings in current circumstances. Centre for Independent Studies Chief Economist Peter Tulip takes the former view, and argues that, relative to the size of the economy, and based on housing construction figures for the past 5 years, this figure will in fact amount to an unambitious ‘step down’. Hal Pawson draws attention to the industry’s downgraded forecasts for housing completions over the next 3 years. Moreover, Pawson highlights that the Budget proposals remain supply side focused, with no attention having been paid to policy settings that influence housing demand.

The Accord’s target may yet prove aspirational depending on the extent to which supply constraints, such as limits on housing construction materials and labour shortages caused largely by COVID-19 restrictions, are ameliorated. A recent research note issued by the NHFIC explores these issues. Interestingly, the note highlights the shift in the drivers of material price inflation between 2021 and 2022. As the HomeBuilder scheme wound down, dampening the demand component which had accounted for 75% of cost inflation in the 2021–22 fiscal year, the supply component of price inflation increased significantly in 2022, now accounting for 83% of material cost inflation in the 2022 fiscal year.

The Government will provide an additional $350.0 million over 5 years from 2024 to support funding of an additional 10,000 affordable homes as part of the Accord. The funding is intended to ‘incentivise superannuation funds and other institutional investors to make investments in social and affordable housing by covering the gap between market rents and subsidised rents’. The states and territories are to support an additional 10,000 affordable homes over the same time period through in-kind or financial contributions that can include ‘already announced but not yet committed projects’.

Housing Australia Future Fund

As noted above, the funding for the affordable housing is to come from returns generated from $10.0 billion invested in the HAFF—managed by the Future Fund Board of Guardians—and transferred to the NHFIC/Housing Australia (Budget paper no. 2, p. 191). Similar to the New South Wales Government’s Social and Affordable Housing Fund (SAHF) ‘a proportion of the investment returns will fund annual service payments that will be paid to community housing providers over 25-years to bridge the gap between rental revenue and operating costs’ enabling them to build more dwellings.

The exact funding mechanism for the HAFF’s establishment is not outlined. However, it is likely that it will be set up similarly to other Future Funds through the creation of a special account under legislation. Budget Paper no. 1 states that the HAFF will require legislation, which will be introduced in 2022–23 (Budget paper no. 1, p. 191).

It should be noted that the Government’s HAFF policy announcement implies that the amounts available for maintenance and crisis housing expenditure through the fund are dependent on investment returns generated by the fund. In other words, if returns are low in a given year, then the available funds for expenditure will be low. This raises the question as to whether a shortfall in a given year will lead to the Commonwealth ‘topping-up’ funding from consolidated revenue. Further, will a bumper year lead to returns in excess of the amounts indicated being returned to consolidated revenue? Lastly, are the figures a realistic amount to meet the stated objective of the fund, particularly in a high-inflation environment?

Economist, John Quiggin has questioned whether the hypothecation model that underpins the HAFF is appropriate for the goal of increasing social housing, arguing:

To the extent that the hypothecation is genuine, it means that the money available for social housing depends on the performance of the share market. And this dependence is the wrong way around. The case for public spending on social housing is strongest, both in terms of need and the availability of resources, when the economy and the share market are doing badly.

On these grounds, Quiggin maintains that ‘the Housing Fund is, quite simply, a poor substitute for direct public expenditure’.

Quiggin’s views find some support in the findings of an AHURI study which examined alternative methods for financing social housing. Based on an extensive assessment of relevant variables and different financing models, the study’s authors argue that the capital grant model (with its direct capital investment) is the most cost-effective investment pathway to deliver required housing outcomes in Australia.


The Budget, and the Government’s election commitments, mark what might be considered a measured return of the Commonwealth to housing policy. While the Budget does not provide funding at the levels required according to most housing experts, it does establish the beginnings of a potentially more cooperative and productive national approach to solving Australia’s housing affordability problems.

Much of the success or failure of the Commonwealth’s return will depend on whether its involvement in national housing policy is sufficiently broad and sustained. Housing researchers Vivienne Milligan and Anne Tiernan maintain that one of the key problems with housing policy in Australia to date has been the Commonwealth’s ‘erratic and patchy’ policy capacity with regard to housing policy and provision (p. 391).


All online articles accessed October 2022

For copyright reasons some linked items are only available to members of Parliament.

© Commonwealth of Australia

Creative commons logo

Creative Commons

With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.

In essence, you are free to copy and communicate this work in its current form for all non-commercial purposes, as long as you attribute the work to the author and abide by the other licence terms. The work cannot be adapted or modified in any way. Content from this publication should be attributed in the following way: Author(s), Title of publication, Series Name and No, Publisher, Date.

To the extent that copyright subsists in third party quotes it remains with the original owner and permission may be required to reuse the material.

Inquiries regarding the licence and any use of the publication are welcome to webmanager@aph.gov.au.

This work has been prepared to support the work of the Australian Parliament using information available at the time of production. The views expressed do not reflect an official position of the Parliamentary Library, nor do they constitute professional legal opinion.

Any concerns or complaints should be directed to the Parliamentary Librarian. Parliamentary Library staff are available to discuss the contents of publications with Senators and Members and their staff. To access this service, clients may contact the author or the Library‘s Central Enquiry Point for referral.