The 2017/2018 Federal Budget was announced last night. Unsurprisingly, it has received a mixed response from Australia’s architecture and built environment industry.

Housing affordability was, of course, a major subject of discussion this year. No doubt in response to mounting pressure, a number of new initiatives and incentives were introduced in this year’s bill.

Here’s a snapshot of the proposed housing affordability package:

  • A new agreement with states and territories will boost housing supply
  • $1 billion to fund ‘micro’ City Deals to boost housing supply
  • Surplus Commonwealth land to be released for housing
  • Senior citizens will be encouraged to downsize
  • Assistance for first home buyers includes option to salary-sacrifice super contributions
  • Negative gearing deductions tightened
  • A new REIT asset class has been created for “affordable housing”
  • Higher CGT discounts introduced for investors in affordable housing
  • A new National Housing Finance and Investment Corporation has been established

aus_housing.jpgHousing affordability was a key subject addressed in the 2017/2018 Federal Budget. Image: Blue Prime Capital

Industry experts and key individuals have been quick to provide comment, with opinions falling semi-equitably on both the negative and positive aspects of the budget announcement.

The national president of the Australian Institute of Architects (AIA), Ken Maher, says Treasurer Scott Morrison has been bold in his approach to tackling what is becoming an increasingly serious issue for Australians.

“This budget looks at ways to improve the housing situation of everyone from our homeless and those needing crisis accommodation, right through to public and social housing, first home buyers, affordable rental accommodation and removing the disincentive for pensioners to downsize,” he says.

Maher mentions that the new Commonwealth land release scheme, together with the $1 billion National Housing Infrastructure Facility, will create important opportunities to further boost supply.

He has also welcomed government measures to promote further private sector investment in affordable housing, and a federal transport infrastructure investment of more than $70 billion to 2022-21. Importantly, this latter includes support for fast rail.

Denita Wawn, CEO of Master Builders Australia, also sees many positives in the government’s housing affordability package.

“[The housing affordability package] – including financial incentives to state and territory governments to meet housing supply targets, and the $1 billion to fund urban infrastructure to unlock more ‘shovel ready’ land for housing development – will help cut the hidden taxes, red tape and regulatory creep that drive up house prices, and help to provide an adequate supply of social housing,” she says.

But does the package go far enough?

While Maher is positive, he also says the government misses the opportunity to focus on density, design and energy efficiency. 

AIA National President Ken Maher welcomes the government’s housing affordability package, but laments the missed opportunity to address the areas of density, design and energy efficiency

“Regrettably, however, the government has not taken this package to the next logical step, which is to better manage the quality of the new supply they want to bring online,” says Maher.

“With tens of thousands of new homes needing to be built every year to keep up with demand, it is vital that we ensure those new residences are energy efficient; that due consideration is given to promoting quality, standardised design principles to address issues of accessibility; and to facilitate ageing in place.”

Maher believes infill has a vital role to play in the future of our cities. “Ensuring this density is done well, integrated with well-designed transport including due consideration of amenity and well-designed public spaces, is the key to achieving successful and enduring city deals.”

Similarly, the chief executive officer of GBCA, Romilly Madew, says, “if this budget is about easing cost of living pressures, then it’s important we build communities that are affordable and sustainable over the long term. And that means building smart from the start.”

“Tax-payers should expect that generational investments in our cities create long-term value and an ongoing return on investment. And any new infrastructure should achieve independent third-party certification that confirms that value.”


Of course, the budget wasn’t all about housing affordability.

“This budget was big on planning for longer term infrastructure dividends,” says Megan Motto, chief executive of Consult Australia.

Key cities and infrastructure commitments this budget round include:

  • Western Sydney City Deal
  • SEQ City Deal
  • National cities agenda
  • National rail program
  • Major infrastructure commitments, such as Western Sydney Airport

The proposed Western Sydney Airport is one of several infrastructure commitments in the budget. Image: Department of Infrastructure and Regional Development 

“[The Budget] recognised infrastructure as a tool to increase productivity, the importance of business case development to get the right projects off the ground, and the role of government in being able to drive economic growth,” says Motto.

Over $14 billion of direct government equity will be allocated to major infrastructure delivery and financing agencies. Motto believes that projects such as Inland Rail and Western Sydney Airport suggests a government that understands the long-term nature of infrastructure projects. 

Master Builders’ Denita Wawn agrees.

“The investment in infrastructure, including urban, transport and defence will reap immediate as well as medium- and long-term benefits.”  

In the short term, Motto says the budget misses the opportunity to capitalise on historic low borrowing rates.

“Historically low bond rates and a triple-A credit rating means there has never been a better time to borrow; to take on more good debt.”

She also says a foreign worker levy for businesses will make it harder for business to bring in the skills that are necessary if we are to deliver on Australia’s infrastructure agenda.

“This is an Infrastructure Budget 1.0 that begs for an Infrastructure Budget 2.0 to better connect the strong sense of direction to implementation and the opportunity for Australia to maintain future economic growth.”

Some important measures for employment and small businesses were also addressed this round.

“There are more building and construction businesses than any other type [of business] in the economy, and this budget will boost their business success,” says Wawn.

The announcement of the $1.5 billion Skilling Australians Fund – not to mention the additional training of 300,000 new apprentices – will have a significant impact on the building and construction industry.

“The funding should enable the training that leads to strong employment outcomes for young Australians in industries where there is jobs growth, such as the building and construction industry,” says Wawn. 

“The budget’s small business measures will particularly benefit the building and construction industry which is [98 per cent] made up of small businesses.”