Government to fund AI tool for housing approvals in budget overhaul
The federal budget will commit $105.9 million over four years to develop an AI tool designed to speed up environmental assessments for housing and energy projects. The measure, to be announced Tuesday, forms part of a broader push to increase housing supply and reduce approval delays.
The AI system will guide developers through the environmental assessment process and share data to help more projects gain approval. A separate $500 million package will fund environmental reforms passed last year, including about $250 million to establish the National Environmental Protection Agency.
Treasurer Jim Chalmers framed the investment as part of a productivity drive. "Our big productivity push is all about getting compliance costs down and cutting red tape, making it easier and faster to build," he said.
Supply-focused strategy with tax changes ahead
The government has already established a strike team to clear the backlog of homes awaiting approval. The environment minister says the team has approved more than 20,000 homes since August last year and expects to reach 26,000 approvals by July.
On Monday, Chalmers announced a $2 billion commitment to fund roads, water, power, and sewage connections for 65,000 new homes. Tax changes confirmed Tuesday will wind back two major housing investor benefits: the 50 percent capital gains tax discount and negative gearing deductions.
Labor's 2025 election victory has given the government political cover to tackle housing affordability, an issue that has drawn voters to the Greens and One Nation over successive elections. Both parties have capitalised on voter frustration over rising property prices that have outpaced wage growth.
Breaking election campaign promises
The tax changes represent a significant shift from Labor's election campaign messaging. Prime Minister Anthony Albanese repeatedly ruled out changes to negative gearing and capital gains tax during the campaign, saying at one point: "Yes. How hard is it? For the fiftieth time."
Chalmers acknowledged the government had focused "almost exclusively on supply" during the election. He said the decision to reconsider tax policy reflects changing circumstances since COVID-19, when house prices surged, migration increased, and construction slowed.
"If a government comes to a different view, then the onus is on the government, senior ministers like myself, in explaining why," Chalmers said. "The housing market is not working for young people. It is locking out too many Australians."
Since the 50 percent capital gains discount was introduced two decades ago, Chalmers noted that house prices have become decoupled from wages.
Opposition argues tax approach will worsen shortage
Shadow Housing Minister Andrew Bragg said the major parties had failed on housing policy for a decade. "Most of the policies that have been turned out have been junk," he said, criticising both Labor and the Coalition for not doing adequate policy work.
Bragg opposed the tax changes, saying higher taxes would not solve a housing crisis made worse by collapsed supply and higher interest rates. "Half the cost of a new house goes in government fees, charges and taxes, so why the hell would you consider putting a new tax on something that is already so heavily taxed?" he said.
For government professionals involved in housing policy or environmental assessment, the AI for Government resources provide practical context on how these tools are being deployed in practice. Those developing policy frameworks may find the AI Learning Path for Policy Makers relevant to understanding implementation challenges.
Your membership also unlocks:
