It’s not often that a federal budget gets architects, designers, and builders as excited as punters with their first Melbourne Cup win, but last night’s budget may have come close to achieving that goal.

With federal treasurer Jim Chalmers telling reporters on Tuesday night that his first budget was “the beginning of something new and responsible”.

More than that. It was the first time in a decade that a federal treasurer has actually addressed the issues of affordable housing, wellbeing and climate change with direct fiscal action.

According to The Australian, the biggest winners in the 2022 Labor Federal Budget were:

Home Buyers: A Housing Accord will build one million new homes over five years from 2024; In addition, 20,000 ‘affordable dwellings’ will be built under a federal-state government agreement.

First Home Buyers: 10,000 places will be available each year for regional first-home buyers to buy a new or existing home with a 5 percent deposit.

Downsizers: An extension of the exemption of home sale proceeds from pension asset testing from 12 months to 24 months. It’s designed to give pensioners more time to buy, build or renovate a new home before their pension is affected. Access to downsizer superannuation contributions will be expanded to include those aged 55 to 59.

Green energy: $20bn of finance will be made available to upgrade Australia’s electricity grid by building interconnectors and linking renewable energy zones to the existing grid. $224m for 400 community batteries across Australia.

Electric Vehicles: Charging stations at 117 highway sites, hydrogen highways for key freight routes, and further investment in charging infrastructure; An Electric Car Discount will exempt eligible electric cars from fringe benefits tax and the 5 percent import tariff. Government fleet cars will be 75 percent electric by 2025.

According to the Housing Institute of Australia (HIA), the federal Budget commitment to a national aspirational target of 1 million new homes over 5 years is the first step in setting a housing benchmark that can be measured, monitored and delivered.

“Labor’s first budget shows leadership to tackle Australia’s housing supply and affordability challenges for all Australians,” says Graham Wolfe, HIA Managing Director.

“Importantly, this target provides a necessary indicator to governments at all levels, that priority action is needed should housing supply fall below 200,000 new homes each year.

HIA’s forecasts show that this situation is playing out right now – with around 196,000 new homes predicted to start in 2022 and 2023, falling to around 185,000 in 2024 and 2025.

“Year on year housing supply shortfalls, as we’ve seen for most of the last two decades, inevitably add pressure to Australia’s housing challenges.”

“For every year that Australia doesn’t deliver enough new homes to meet demand across the housing continuum, we will see a negative impact on both housing affordability and rental affordability,” the HIA says.

According to a Sydney Morning Herald analysis of the budget, some of last night’s main winners in the building sector were:

Young home buyers: A housing future fund, for a government co-investment scheme and a regional housing scheme.

Builders: One million new homes will be built over five years from 2024. That’s a lot of overtime.

Infrastructure: The suburban rail loop in Melbourne, Queensland’s Bruce Highway, high-speed rail between Sydney and Newcastle and Canberra’s tram network will all benefit from $8.1 billion in new money for infrastructure projects.

Patrick Elias, Urban Property Group CEO says: “Urban Property Group welcomes the Federal Government’s plans to boost investment in housing. Housing affordability is an issue impacting almost every Australian, so increasing supply should be front and centre of any policy response. This can be complemented by making planning processes more efficient, and incentives that encourage longer term investment horizons.  

"We have seen how ongoing cost-of-living pressures have had a disproportionate effect on the already disadvantaged in our community. Escalating rents have priced essential workers out of properties nearby their work, which has dramatically reduced quality of life and is impacting access to key services."

Now, more than ever, all sectors need to work together to address these urgent issues, including private investors, government, developers and not for profits," he says.

As The Conversation wrote this morning, "Jim Chalmers’ inaugural budget plants its feet as solidly as possible in the shifting sands of difficult and unpredictable international and local conditions.

Chalmers promised the budget would be “workmanlike”, not “flashy”, and he’s kept his word. Almost all of it had been pre-issued by the government, including measures and numbers.

This can be seen as an interim budget, a new government taking stock and getting some early action under way.

Time will tell.

Image: https://www.constructiontuts.com/construction-industry/