Jim Chalmers insists Labor can meet target of 1.2m new homes despite department warning
Calling housing shortages 'one of the defining challenges' facing the Australian economy, Chalmers downplayed advice from Treasury officials saying the current policy settings would not deliver the new homes and warning Labor would need to increase taxes to make the budget more sustainable.
The comments were included in the incoming brief delivered to Chalmers after Labor's 3 May federal election victory, and accidentally made public in subheadings in a redacted version of the document released to the ABC under freedom of information rules.
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Treasury officials asked the public broadcaster to delete the version released without full redactions. A less revealing version has been posted by the department online.
Chalmers said the advice reflected what he and the housing minister, Clare O'Neil, had been saying since before the election.
'We will need more effort to reach that substantial, ambitious housing target,'
he said.
'We're investing tens of billions of dollars. We're working well with the states and territories and local governments. We're engaging with the industry. We're trying to get the capital flowing. I've changed the tax arrangements for build to rent.
'But we'll need to do better, and we'll need to do more, and the advice just reflects that.'
Economists and industry players have warned Labor will miss its goals. Deloitte Access Economics research released in October forecast Labor would deliver fewer than a million new homes by 2029 – at least 200,000 below its promised target.
Separate Housing Industry Association research has found the target for 1.2m new homes within five years would require a 50% increase on 2024 construction levels.
To meet its promise, Labor needs an average of 240,000 new homes need to be built each year. But Australia has only ever come close to that level twice, in 2016 and in 2021. In 2023, only 173,000 homes were completed.
Before the election, Labor pledged $10bn to build 100,000 homes over eight years, set to be offered for sale to first home buyers, as well as an expansion of a scheme allowing first home buyers to purchase a home with just a 5% deposit.
The government has changed tax settings in the build to rent sector and banned foreign buyers from purchasing homes in Australia for two years.
Chalmers said he was 'relaxed' about the error that saw extra information from the brief publicly shared, but said he would not make the full unredacted document public. Incoming government briefs from across government departments are routinely released to journalists, but with sensitive advice from senior public servants kept secret.
On tax, Chalmers said addressing the federal budget's structural deficit was a key priority for Labor and would be achieved through less spending, more savings from income derived from commodity prices and some higher taxes.
'We've already made it really clear that we will do more to make our economy more productive and more resilient, we have made it clear that we need to build on the progress we've made in repairing the budget so that we can make the budget even more sustainable.'
He confirmed next month's productivity roundtable would be structured around the themes of resilience, productivity and sustainability.
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