AHURI BRIEF

What’s in the Federal Budget for housing, homelessness and cities?

An overview of the government’s spending in the delayed 2020-21 Budget

14 October 2020

The Australian Government released its 2020 Budget on October 6. In particular, the Budget is focussed on the impacts of the COVID–19 pandemic and the economic contraction that has caused for the community.

Overview

The Budget estimates for 2020–21 show increases in spending housing and cities programs.

Overview summary of expenses

ActualEstimates
 2019–20 ($m)2020–21 ($m)
Housing2,7523,709
Urban and regional development1,2921,954

Expenses for Housing are estimated to increase by 34.1 per cent in real terms from 2019–20 to 2020–21. The Housing section includes the Australian Government’s contribution to the National Housing and Homelessness Agreement, the provision of housing for the general public (e.g. in the time–limited, COVID response HomeBuilder program) and people with special needs, housing support through the National Housing Finance and Investment Corporation (NHFIC) and Defence Housing Australia (DHA) expenses.

The Urban and regional development section includes City and Regional Deals, services to territories and regional development programs, including Community Development Grants and the Building Better Regions Fund. Expenses are estimated to increase by 50.5 per cent in real terms from 2019–20 to 2020–21 reflecting a number of 2020–21 Budget measures, including Supporting Regional Australia, Community Development Grants — new projects, Extending the Stronger Communities Programme — round six, Services to Territories and the Perth City Deal.

Overview of key measures

Increase for First Home Loan Deposit Scheme

The number of homebuyers who will be able to participate in the First Home Loan Deposit Scheme has been increased by 10,000 to 20,000 buyers for this financial year to June 2021.

The Scheme allows first home buyers to obtain a loan to build a new dwelling or purchase a newly built dwelling with a 5 per cent deposit.

HomeBuilder Grant

As part of its COVID–19 Response Package, the Government will provide $680.0 million in 2020–21 for the HomeBuilder program to support jobs in the residential construction sector.

HomeBuilder will provide eligible owner–occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially rebuild an existing home where a contract was entered into between 4 June 2020 and 31 December 2020 and building commenced within three months of the contract date. HomeBuilder is limited to new homes worth less than $750,000 and to renovations of between $150,000 and $750,000 where the total value of the property is less than $1.5 million pre–renovation.

National Housing and Homelessness Agreement

In 2020–21, the Australian Government will provide funding of $1.6 billion through the National Housing and Homelessness Agreement (NHHA)

In 2020–21 the distribution across states and territories is:

$millionNSWVICQLDWASATASACTNTTOTAL
 489.3414.6327.6170.3110.934.527.120.21,594.5

[Australian Government funding under the NHHA is ongoing and indexed by Wage Cost Index 1 (a 1.25% annual increase). The Australian Government’s contribution to homelessness funding will be matched by the states.]

Increase to capacity of the National Housing Finance and Investment Corporation

Previously the Australian Government has made available a line of credit for the NHFIC Affordable Housing Bond Aggregator (AHBA) so as to attract institutional investment to increase the supply of affordable housing owned by community housing providers (CHPs). In essence, the Australian Government guarantees the due payment of money payable by NHFIC to any entity other than the Government.

In the 2020–21 Budget the Government is increasing NHFIC’s cap on total guaranteed liabilities by an additional $1 billion to $3 billion.

The Government will also undertake an independent review of the NHFIC to establish whether it is meeting its objectives of improving housing outcomes for Australians.

Indigenous and remote area housing

Remote housing – Queensland and Northern Territory

This funding supports the delivery of new houses, housing refurbishments and housing–related infrastructure. It also provides incentives to establish more sustainable housing systems in remote Indigenous communities.

The Queensland component is part of the agreement reached with the Queensland Government to assume full responsibility for housing in remote communities.

$millionQLDNTTotal
2020–21100.0137.2237.2
2021–22-185.0185.0
2022–23-110.0110.0
Total100.0432.2532.2

Northern Territory Remote Aboriginal investment remote Australia strategies

The remote Australia strategies component provides funding to improve public housing in remote communities by investing in housing works and removing asbestos from community buildings

This funding complements the funding provided under the agreement on remote housing.

$millionNTTotal
2020–213.73.7
2021–223.73.7
Total7.37.3

Indigenous Home Ownership Program

The Government will provide an equity injection of $150.0 million over three years from 2020–21 to Indigenous Business Australia for new housing construction loans in regional Australia through its Indigenous Home Ownership Program.

This will help Indigenous Australians into home ownership and support the construction sector in the regions, while also providing an immediate, targeted fiscal stimulus to regional Australia by injecting liquidity into the financial and construction sector and generating positive flow–on effects for regional businesses.

Social impact bonds

The Australian Government will provide funding to state governments to trial social impact investments which aim to assist vulnerable priority groups and to help young people at risk of homelessness.

$million2020–21

2021–22

2022–232023–24
Vulnerable priority groups0.51.10.50.5
Youth at risk of homelessness0.51.10.50.5

City Deals

The Commonwealth is already delivering City Deals in Townsville, Launceston, Western Sydney, Darwin, Hobart, Geelong and Adelaide. In addition the Government is providing $327.5 million over 11 years from 2020–21 to the Perth City Deal to support long–term growth by attracting people back into the city.

Perth City Deal

This City Deal includes:

  • $245.0 million to relocate the Edith Cowan University campus into the Perth CBD
  • $47.5 million for a CBD Transport Plan to improve cycling and walking infrastructure, bus stop accessibility and safety in Perth’s CBD
  • $30.0 million to extend the Perth Concert Hall, upgrade the Perth Cultural Centre precinct and to fund homelessness projects in the Perth CBD
  • $2.0 million to support the development of preliminary designs for the Noongar Indigenous Cultural Centre.

Funding for this measure has already been provided for by the Government.

City Deal funding

$million

2020–21

2021–22

2022–23

2023–24

Adelaide City Deal10.827.023.090.0
Albury Wodonga Regional Deal3.2---
Barkly Regional Deal8.48.46.8-
Darwin City Deal45.027.3--
Geelong City Deal81.856.632.74.5
Hinkler Regional Deal10.8---
Launceston City Deal8.812.416.37.6
Perth City Deal36.877.863.759.0
Townsville City Deal175.075.020.0-
Western Sydney City Deal42.818.1--

Infrastructure

The Budget included an increase on infrastructure spending from $100 billion to $110 billion over the next 10 years. This includes a COVID-19 infrastructure package that will provide significant near-term investments in major road and rail projects, road safety and community infrastructure.

The Budget will fund major projects across each state and includes a $2 billion investment in road safety upgrades.