The nation’s peak business body has called for a $10bn housing reform fund that will pay out to states that fix the regulation and planning bottlenecks contributing to the supply crisis.
The Business Council of Australia is also pushing for the nation-wide removal of stamp duty on homes, warning that it disincentivises people from moving to smaller dwellings and freeing up larger homes.
The industry body’s housing report, released on Monday, has called for “urgent action from all levels of government” as the Albanese government lags behind in its target to build 1.2m new homes by the decade’s end.
Labor’s national housing accord promises to reach the target in five years, requiring a yearly average of about 240,000 homes. The Business Council said 64,000 more new homes needed to be built each year to achieve the target.
About nine dwellings would need to be built for every 1,000 people each year but current figures suggest that figure is now standing at six.
The report offers 29 recommendations but its most critical is a national reform fund, similar to a pro-competition model introduced in the 90s.
About $5bn in funds were given to state and territory governments for successfully rolling out economic reforms. The Business Council estimated at least $10bn would have to be committed in today’s money to drive urgent reform, including the phasing out of stamp duty and a transition to land taxes.
“We back many of the measures that are already being rolled out, but the scale of the task before us remains immense, and so we need every good reform on the table if we’re to hit our targets,” said Bran Black, the council’s chief executive.
“Stamp duty represents a massive upfront cost for people who want to move, whether to downsize and free up a family home or to move closer to a new job.”
The council has recommended that the Albanese government deliver more investment into boosting apprenticeship numbers, fast-tracking permanent residency for relevant skilled workers and encouraging states to adopt the same trade licensing rules for better workforce mobility.
The report’s release comes days after the opposition unveiled more of its plans to try to alleviate the housing crisis.
The Coalition announced on Saturday that $5bn in funding, in the form of grants and concessional loans, would go to industry, local councils and state utilities to build infrastructure including water, power and sewerage. It estimated up to 500,000 homes could be built mostly on greenfield sites.
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The plan also proposes to freeze any changes to building codes for 10 years, claiming updates, such as those requiring homes to meet higher energy efficiency standards, have added thousands to housing prices.
The policy is similar to Labor’s $500m in funding for state, territory and local governments until mid-2025, with a further $1bn for infrastructure for social housing.
The housing minister, Clare O’Neil, said Peter Dutton’s proposal would still cut $19bn from Labor’s housing commitments, including the Housing Australia Future Fund, which has been running since November 2023.
Two other government proposals, the Help to Buy and Build to Rent schemes, have been unable to pass parliament.
Ben Phillips, an associate professor at the Australian National University’s Centre for Social Research and Methods, criticised the opposition’s estimates.
“This program may have some small impact at the margin but it won’t induce anything like the numbers hinted at,” he said, adding that he shared concerns about whether Labor could reach its 1.2m new home target.
The director of the Australian Centre for Housing Research, Emma Baker, said focusing on greenfield sites would “kick the can down the road” on housing prices, as developing new sites further from major city hubs would cost more in the long term.
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