Posted May 18, 2018 07:01:18 Australian Treasurer Scott Morrison is set to cut spending on housing by around $10 billion, as the government grapples with a global recession.
While that is not a lot of money, it’s enough to help the government address the affordability crisis that has been the main concern of Treasurer Joe Hockey since the budget.
It is also a welcome relief from the previous government’s austerity policies, which have seen the federal government borrow more to fund infrastructure and other key projects.
But it will only help address the problem of a lack of affordable housing, which has been a key concern of many.
The Federal Government is spending less than the average in the world, a trend that has continued since the election, and is forecast to continue into the future.
In a report released on Tuesday, the National Housing and Communities Agency (NHCA) forecasted the number of people who need housing assistance to increase by 9.5 per cent to a record 1.7 million by 2021-22, and the number who are receiving it to increase to 6.5 million.
This is in line with forecasts from the US Federal Reserve, which also forecast the number would increase to 5.7 per cent by 2021.
NHCA chief executive officer Michael Wilson said there was a strong chance of a higher increase.
“It’s not just the number, it is also the amount of people in need,” he said.
“We’ve got to make sure we’re not over-relying on those that are actually in need.”
While the figures are good news, the report does not include a breakdown of the costs to the government.
The NHCE also said the cost of providing housing assistance is expected to increase over time.
Mr Wilson said the government is also aiming to cut the cost to consumers by an estimated $20 billion.
But the increase is likely to come at the cost the budget has been making for the past six years.
“Our budget was pretty badly cut, and so we’re still looking at what the government’s done and how we’ve got it back in the budget, and how it will look to the public,” he told ABC Radio Melbourne.
The Treasurer said that while the $10bn in cuts to the housing assistance budget would be a significant change from the $15bn he was previously planning to cut from the budget over the next four years, he was confident that the government would meet the targets.
“There’s a fair bit of certainty and we’re confident we’re on track,” he added.
The Government has also promised to spend $30 billion over four years to address the “housing affordability crisis”.
But the Government has faced criticism from its own housing experts, who say the plan is “not likely to address affordability”.
While the Government says the plan will bring an additional $1.6 billion to the budget in 2021-02, experts have questioned the plan, arguing it will fail to meet the needs of Australians.
“The Coalition’s plans for housing affordability do not seem to address any real issues for Australia’s future housing stock, as there is no clear path to an affordable housing plan,” said Robert Sprenger, director of the Australian Institute of Housing Policy and Management.
“For example, there is not enough supply to meet demand, there are insufficient housing options, and there are too few affordable housing options to meet Australian demand,” he wrote in the Australian Financial Reviews.
“Housing affordability is a national priority for the Government and the housing sector, but the Coalition’s housing affordability plans are not likely to achieve any real gains in the short term.”