Budget criticised for lack of affordable housing initiatives

Builders around the country have backed the key initiatives in the Federal Budget that will help promote economic growth across the country.

Denita Wawn, CEO of Master Builders Australia, welcomed the Government’s announcements on new investment in skills, infrastructure and small business because they are targeted at what’s needed to strengthen the economy.

“While there was good economic news in this budget, Master Builders is concerned that Treasury, in line with Master Builders forecasts, predicts a seven percent decline in housing investment. This reinforces the need to ensure that all housing investment incentives remain intact,” Denita Wawn said.

The Budget speech, by the Treasurer Josh Frydenberg acknowledged housing affordability was an issue for Australians.

“Affordable housing is a priority for the government,” but for the second consecutive year the Budget failed to address issues either short-term or structural.affordable housing

There was funding for affordable housing for community and social housing, but the Federal Budget fails to offer any new affordable housing initiatives, says an industry body.

While the previous year’s budget places affordable housing as a central plank, this year’s marks a significant contrast, says Nicholas Proud, CEO of PowerHousing Australia, which represents scale-growth community housing providers.

“The nation built the most significant social bond and National Housing Finance Investment Corporation in the two years since Budget 2017, and further work around this infrastructure boost will be needed to tackle affordable housing deficits across the nation,” Proud said.

“It was terrific to see the Treasurer referencing NHFIC’s work in tonight’s budget speech.

“Their support will enable our members to scale up and deliver the affordable housing at scale that Australians need.”

Proud welcomed the 2019-20 Federal Budget’s increase in infrastructure spend, which is set to hit $100 billion over a decade.

“The infrastructure investments announced tonight complement these prior investments by helping to reduce congestion and make it easier for Australians, including key workers and those on low and middle incomes, to more easily get to and from work.

“Australia is heading for a slowdown in new housing delivery at rates never seen before which will place a handbrake on jobs, see less taxes collected, state economies decline and supply contract which only serves to place upward pressure on pricing.

“Whilst there is a federal election campaign just days away, the innovative leadership of the 2017-18 Budget should not be a one-off, particularly as we are heading to declines in future year building approvals of up to 50,000 dwellings compared to the levels experienced in the year up to March 2018.

“There are tens of thousands of families who, over the next five years, are set to see the loss of the NRAS One incentives which started to lapse in December 2018. A response to non-CHP managed NRAS homes is critical.

“We warmly welcome this budget’s record investment in women’s safety, including $78.4 million to provide safe places for people impacted by domestic and family violence.

“These Australians will also benefit from the additional tax cuts included in this year’s budget, which had a strong focus on cost of living – something that remains top of mind for so many people.”

Ray White managing director Dan White congratulated Treasurer Josh Frydenberg on his first Federal Budget which he called a welcome ‘shot in the arm’ confidence boost for all Australians.

Some 10 million Australians will be showered with $158 billion in tax cuts,  with the average earner saving $10,000 over six years.

The pre-election Budget supercharges rewards for workers, small business, older Australians, women and the youth plus a promised $100 billion infrastructure spending spree.

“The Coalition’s tax relief promises are welcome and will be a shot in the arm to every household in Australia,” Mr White said.

“A strong economy needs ongoing investment and we are delighted to see the Coalition boost its infrastructure spending to unlock our regions and help ease congestion in our cities.

“This Federal Budget and its growth projections are heavily reliant on our already softer housing market holding up.

“But no-one in Treasury has a calculator that can accurately predict house prices.

“That is the great unknown in this budget and easing house prices are clearly Treasury’s economic wildcard.

“Ray White remains optimistic about the Australian housing market but we hope the Government keeps its focus on the housing sector and is ready with a contingency plan if their assumptions and  forecasts aren’t met.”

The Budget papers highlight the downside risk of a further deterioration in housing prices on dwelling investment and household consumption, noting that if consumption dropped one per cent as a result, this would shave a quarter of a per cent from GDP growth.

Treasury says new dwelling investment will only grow 0.5 per cent this year, before dropping by 7 per cent in 2019-20 and a further 4 per cent in 2020-21 as existing projects are completed.

Article originally published www.propertyobserver.com.au