A billion-dollar government fund aimed at getting apartments built will help developers clear a “major hurdle”, but the challenge of meeting an ambitious national housing target remains unresolved.
The yawning gap between NSW’s rate of building homes and a five-year national target to improve housing affordability has come into sharp focus as state Treasurer Daniel Mookhey spruiked his third budget.
The Labor treasurer will address big business at an economic forum on Wednesday, after delivering a $128 billion budget that some observers suggest was tailored to the top end of town.
Critics have questioned why the budget did not do more for the struggling health sector, household budgets and social services.
The budget forecasts 240,000 housing completions by 2029, exceeding the previous government’s forecast but falling drastically short of the 377,000 new homes targeted under a national housing agreement.
Mr Mookhey said the forecast was a point-in-time prediction and progress to speed up construction would be reflected in future forecasts.
“By the time we get to the next election (in March 2027), voters will see this government has spent four years doing everything it can to surge more building of the homes that people desperately want to buy and rent,” he told reporters on Wednesday.
Approval processes had quickened and the focus had shifted to construction, Planning Minister Paul Scully said.
“You can’t live in an approval,” he told reporters.
Tuesday’s 2025/26 budget featured increased investment in essential services and lower debt, complete with a $1 billion fund to help developers secure financing.
Proposals need to start within six months and developers will be assessed on credibility, capability and capacity before the government will help them reach a threshold of pre-sales to satisfy lenders.
“This is for good projects that are suffering from a tiny bit of a feasibility question, to get them over the line to start construction,” Mr Scully said.
Builders say construction is often delayed by a lack of pre-sales, making it harder to get finance.
“Pre-sales represent a major hurdle for new housing developments, especially higher-density housing and apartments,” Housing Industry Association NSW executive director Brad Armitage said.
Others were less impressed with the government’s finances, with NSW Greens MP Abigail Boyd labelling it “a budget for big business”.
“It’s a betrayal to all those in our communities doing it toughest … while leaving billions in uncollected revenue on the table from big business,” she said.
Among the Greens’ gripes was a failure to tweak gambling taxes exempting clubs from tax on their first million dollars of poker machine profits.
Hotels begin paying tax at $200,000.
The Australian Medical Association criticised “little meaningful funding for the state’s ailing public health system”.
“Doctors on the frontline are grappling with more acutely unwell patients with increasingly complex healthcare needs and the funding provided in this budget fails to address that,” AMA NSW president Kathryn Austin said.
A deficit of $3.4 billion is forecast for the 2025/26 financial year, falling to $1.1 billion in 2026/27.
Modest surpluses of $1.1 billion are projected in the following two years.
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