Treasurer Jim Chalmers has confirmed there will be a focus on housing in his third budget.
"Renters are under pressure, in particular, and that's why you can expect to see new initiatives in the budget on housing," he told reporters in Canberra on Tuesday.
Last week, the independent National Housing Supply and Affordability Council inaugural report painted a troubling picture of Australia's housing system.
Rents have been outpacing wage growth and vacancy rates have been hovering around all-time lows, leading to a surge in housing insecurity and homelessness.
Nearly 170,000 households are on public housing wait lists and 122,000 people are experiencing homelessness.
Our much more responsible approach to the budget means much less debt in the budget. Because of — Jim Chalmers MP (@JEChalmers) @AustralianLabor's efforts, debt will be much lower than under our predecessors. They budgeted for a trillion dollars of Liberal debt, we've got that down by $152 bil. #auspol #ausecon pic.twitter.com/8PxOtQCNtaMay 7, 2024
While lagging supply is a fundamental driver of Australia's housing issues, the council's chair Susan Lloyd-Hurwitz says the shortage has been exacerbated by rising interest rates, skills shortages in the construction industry, builder insolvencies and a rebound in migration.
Dr Chalmers said a lack of housing supply was the foundational issue.
"That's why we've got an ambitious but achievable target of 1.2 million new homes built between the five years from July of this year," he said.
He also addressed concerns from industry groups and others the target would not be met, noting that a "lot of people say that we are falling short of those targets when that period hasn't started yet".
New figures released ahead of the budget show federal government debt is expected to be $152 billion lower than forecast ahead of the 2022 federal election.
The budget will show gross debt reached $904 billion in 2023/24, down from projections of more than $1 trillion at the time of the federal poll.
This was a result of savings and several economic factors, the treasurer said on Tuesday.
"It's about the $50 billion in savings that we found in the budget, it's about the spending restraint that we've shown in the budget, it's about the labour market being more resilient than people may have anticipated," he told reporters.
Treasurer Jim Chalmers has pointed to lower debt levels in his third budget. (Mick Tsikas/AAP PHOTOS)
"The combination of all of those things means that we've been able to get debt down substantially."
Debt as a share of gross domestic product is also expected to peak lower compared with mid-year economic and fiscal outlook forecasts.
The government is also expected to save about $80 billion in interest costs over the decade to 2032/33.
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