Australia’s new Labor government has unveiled an agreement aimed at building a million new homes over five years from 2024.

In his first budget, presented to Federal Parliament tonight, treasurer Jim Chalmers said the National Housing Accord would align for the first time the efforts of all levels of government, institutional investors and the construction sector to help tackle the nation’s housing problem.

Chalmers said the government would allocate an initial A$350m (€224m) in federal funding to the programme over five years from 2024.

“This funding will incentivise superannuation funds and other institutional investors to make investments in social and affordable housing by covering the gap between market rents and subsidised rents,” he said.

The funding would be on top of an election promise to establish a A$10bn Housing Australia Future Fund (NAFF).

The federal government will use NAFF to encourage institutions to invest in social and low-cost housing, while local government would be encouraged to free landholdings and the construction sector would be asked to back high energy-efficiency buildings.

He said the newly-launched Investors’ Roundtable, which was set up to bring together investment community leaders, including from some of Australia’s largest superannuation funds, the major banks and global asset managers, would meet for the first time next month.

Among those sitting at the roundtable are the chief executives of the big four retail banks and Macquarie Group and the local subsidiary of BlackRock. Australian super funds are also represented.

Responding to the government’s latest housing initiative, Martin Fahy, chief executive of the Association of Superannuation Funds of Australia, said: “The commitment solidifies the involvement of superannuation funds, banks and institutional investors to play a role in addressing Australia’s social and affordable housing challenges.”

Debbie Blakey, chief executive officer of HESTA, an industry fund, said: “Large investors like HESTA will invest more if we can get policy settings in place that can help us achieve appropriate, long-term returns for members.

“Policymakers have an important role to play in catalysing investment through fostering innovative collaboration opportunities that we hope will emerge from this Accord process,” she said.

HESTA looked forward to working with all stakeholders to further develop financing approaches that aimed to create appropriately-scaled opportunities with the necessary risk and return characteristics for investors seeking either debt or equity exposure, she added.

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