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Pressure piles on federal government after Victoria’s record social housing drive

The federal government has been urged to match the Victorian government's record-breaking social housing package.

The federal government has been urged to match the Victorian government's record-breaking social housing package. Photo: Getty

The federal government has been urged to use its “financial firepower” to match the Victorian government’s $5.3 billion commitment to social housing – the largest single spend of any state or territory in history.

But experts suggest the package exposes the Coalition’s unwillingness to hedge its bets on infrastructure projects that provide immense economic benefits.

Under the pre-state budget announcement, Victoria will build more than 12,000 dwellings within the next four years to meet the growing demand for low-cost housing.

Victorian Premier Daniel Andrews on Sunday said the package, which is estimated to generate $6.7 billion in economic output and create 43,000 jobs, is the “biggest boost to social and affordable housing in the history of our country”.

“Because it delivers for [our most vulnerable] and for many others who have the least power, we are all better off. We are all more powerful. We are all more fortunate. We are all more prosperous,” Mr Andrews told reporters.

However, the unprecedented push follows decades of underperformance as Victoria has distributed fewer dollars per capita towards new social housing dwellings compared to all other jurisdictions.

And according to The Guardian, the government has only built 57 of 1000 social housing units pledged to be constructed by 2022 under a plan unveiled in 2018.

Victorian Council of Social Service CEO Emma King said the “colossal” spending drive would allow fewer people to live without a roof over the heads and foster jobs growth.

“It’s that simple,” Ms King said.

“A single investment of this scale has not been seen in many decades, if ever. It’s a game changer.”

Council to Homeless Persons CEO Jenny Smith also congratulated the government, suggesting the “historic” project would help make the state more resilient as it recovers from the aftershocks of the pandemic.

NSW Treasury also confirmed to The New Daily more social housing projects will be unveiled in Tuesday’s state budget, after declaring 100 dwellings will be built in western Sydney and regional NSW under an $80 million plan to support the construction sector.

Feds face heat over social housing hesitance

Victoria’s commitment to social housing follows the federal government’s lack of any direct spending in October’s federal budget.

Instead, Treasurer Josh Frydenberg dedicated $1 billion to increase the capacity for the National Housing Finance and Investment Corporation to guarantee social housing projects built by community housing providers.

But social housing advocates say the federal government has the capacity to match – or even better – Victoria’s proposal.

Many have called on the government to implement a so-called SHARP proposal, which would cost $7.2 billion to create 30,000 new homes nationally and provide support for 18,000 construction workers.

UNSW housing professor Hal Pawson told The New Daily he’s expecting federal politicians to ride on the coattails of the announcement after the government in September hinted social housing was firmly a state responsibility.

“The amount of money, over a relatively short number of years, is pretty breathtaking, but the danger here is the Commonwealth is let off the hook,” Professor Pawson said.

“What you can certainly say is Victoria in a sense has illustrated how far a state government can go if it chooses to do so, but it can’t keep up that spending because only the federal government has the financial firepower to sustain investment at scale, beyond a one-off sugar hit.”

Professor Pawson said Victoria’s project, which will see 3000 new homes constructed per year over its lifetime, matches the average yearly social housing build across the country over the past 25 years.

But the government has far greater potential to pull the trigger for a long-term strategy, Professor Pawson said, given its tax-raising powers and ability to borrow money cheaply from the Reserve Bank.

It’s only a matter of whether the government is willing to depart from its private sector-led coronavirus recovery strategy, he said.

“The notion of stimulating economic recovery through direct investment has been very definitely rejected by the Treasurer, but it’s not just on social housing – it’s on infrastructure generally,” Professor Pawson said.

“Compared with the largesse through tax cuts and incentives, it was peanuts.

“But these decisions from both federal and state governments have been politically consistent with one level of government run by a Liberal Coalition, and another under Labor control which feels more comfortable taking on debt to invest in infrastructure over balancing the books.”

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