Labor’s Housing Supply Plan Lacks Workers
In the midst of increasing housing prices and uncertainty about interest rates, Labor has proposed a goal of increasing the housing supply in Australia. The government’s target is to have 250,000 homes built every year for the next four years. The current number of homes built annually is 170,000.
In response, the Coalition responded with their competing housing policy to increase home ownership among first home buyers.
Unrealistic Targets
According to Tim Reardon, the chief economist at the Housing Industry Association, Australia lacks tradespeople to meet Labor’s housing supply targets.
“We can build 200,000 to 220,000 with the labour force we have at the moment, [but] getting to 250,000 is the point at which we need more skilled labour,” said Reardon.
Reardon claims the workforce is losing housing labourers to the mining industry and other construction industries. According to the government, average weekly earnings in the construction industry are about $100 less than the median across all industries.
Reardon said many tradespeople are turning to other careers, and migrants are not entering the workforce quickly enough.
According to a National Centre for Vocational Education Research report, the number of new trades apprentices has fallen by about 10,000 compared to 2021.
Addressing Home Ownership
In response, both Labor and the Coalition have proposed subsidies to address the issue of labourers. However, these programs would not adequately solve the problem, according to the Australian Housing and Urban Research Institute.
In addition to addressing the issue of home ownership from the housing supply side, both parties have committed to first home buyer plans.
“We’ll have more tradies coming in under our scheme,” Peter Dutton said.
However, economists have responded, saying both parties’ measures could be inflationary.
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