NSW Government budget response fails to match the scale and depth of the housing crisis

Budgets are about choices and priorities. The NSW Government in its budget papers has done a good job at explaining how bad the housing crisis is, but has failed to commit itself to fixing it. This is despite an expected additional $9.5 billion it expects to receive from transfer duty – a direct result of the booming private housing market.

The $224 million Essential Housing Package is a modest announcement. It will only just keep key homelessness programs running but doesn’t address the huge increase in demand for services. Much of the $224 million, including $70 million for more housing, is locked up in funds that are difficult to access. By contrast the $998 million commitment to the first home buyer program (well-known to backfire) seems a large and disappointing choice of public spending.

NSW has a shortage of 221,500 social and affordable housing and needs a solid stock of social housing (public and community housing) as a genuine alternative to the private rental market. The last decade has seen the steady decline of social housing stock in NSW, now languishing at 4.6% and falling. The safety net of social housing is in tatters. There are over 57,000 households waiting for social housing. With a growing population and more general housing stock being encouraged, the NSW Government needs to step up its commitment.

Shelter NSW welcomes the $300 million investment in Landcom to enable it to deliver more affordable housing in both metro and regional areas. Investment in the Aboriginal Housing Office (AHO) and its programs is also welcome.

Shelter NSW is pleased to see substantial investment to rebuild essential public services. This is long overdue but it won’t resolve the problem those workers face in accessing affordable housing close to where they work. Essential workers, especially those in the carer economy face long commutes to their workplaces across Greater Sydney and in big regional cities and towns.

Investment to support Sydney and NSW as it grows is necessary and important. But we need to make sure that the critical infrastructure of social and affordable housing is also secured.

Shelter NSW expects to see the NSW Government drive greater housing density around key transport nodes. We are calling for an assurance that the general community will benefit from commercial gains that will be made as land is rezoned and built out (and up). The government has the option to require genuinely affordable housing is delivered with that density.

Quotes attributable to John Engeler, CEO Shelter NSW

“This budget represents some early steps, some would say baby steps. We need some bold strides”

“The private housing market in NSW is speculative and volatile with consumers barely hanging on and many low-income people left behind. We need the steady hand of Government – consistently growing the stock of social and affordable housing where and when its needed.”

“The NSW Government profits directly from the private housing market. Treasury papers forecast it receiving a whopping, additional $9.5 billion land in its coffers over the next four years. This is due to booming house prices and the large number of transactions. Surely the NSW public have a right to see some of that reinvested back into social housing infrastructure?”

“At the time of the 2021 Census, 29,000 essential workers in the Sydney metropolitan region and its surrounds were in households experiencing rental stress. It’s no exaggeration to imagine an aged care worker having to sacrifice 3-4 hours each day for the commute between Mosman and Campbelltown. These workers need affordable housing close to where they work.”

“First home buyer programs are politically irresistible and very popular. But they don’t work systemically. They simply arm buyers with more cash to outbid each other, pushing up prices. $998 million over four years being gifted to first home buyers would be better spent directly on social and affordable housing for low-income people and essential workers and homelessness services.”

“We welcome the investment in Landcom and the Aboriginal Housing Office. As Government agencies they are well placed to deliver social and affordable housing that is well-designed, located and appropriate for a changing climate.”