Labor Government’s New Policies Under Scrutiny as Analysts Dive Into Facts and Promises

Why It Matters

The budget’s tax and migration choices could deepen Australia’s housing shortage, raising costs for buyers and renters while constraining construction activity.

Key Takeaways

• Migration forecast rises to 295,000, then 244,000 next year.
• Labor promises on housing supply clash with tax policy changes.
• Negative gearing reforms could cut 35,000 homes from market.
• Construction costs have risen over 50% in past five years.
• Industry faces 300,000 skilled worker shortage, migration reforms needed.

Summary

The newly released budget paper shows the Labor government projecting 295,000 overseas migrants this financial year and 244,000 the following year—both higher than previous estimates and higher than when the government took office. The figures arrive amid criticism that the budget’s housing measures fall short of the 1.2 million‑home target promised during the election.

Industry leaders, led by Master Builder’s CEO Denita Warren, argue the budget breaks key promises. They point to the decision to tighten negative‑gearing and capital‑gains‑tax rules, which the government admits will reduce housing supply by about 35,000 units. At the same time, construction costs have surged past 50 % over the past five years, eroding builder confidence.

Warren warned, “We are already 200,000 homes short; cutting another 35,000 is unacceptable.” She also highlighted a 300,000‑worker shortfall in the sector—115,000 needed for the housing accord and another 200,000 for infrastructure—while noting that apprenticeship funding has been cut and skilled‑migration pathways remain inadequate.

The combined effect threatens to widen Australia’s housing affordability gap and stall infrastructure projects. Policymakers will need to reconcile tax reforms with realistic supply targets and consider a more aggressive skilled‑migration strategy to bridge the labor gap.

Original Description

Master Builders Australia Chief Executive Denita Wawn has commented on the broken promises of the Labor government beyond negative gearing and capital gains.

“A series of broken promises here, first and foremost, the Prime Minister said repeatedly during the election and immediately after the election that his focus was on the supply of homes,” Ms Wawn told Sky News Australia.

“The second broken promise, he would not touch negative gearing or capital gains tax.

“Disappointingly, virtually nothing on workforce needs of the industry … they’ve actually put less money into apprentices, not more and nothing on skilled migration, so really disappointing last night beyond the CGT.”