States and territories will receive a “new home bonus” of up to $3bn if they help reach an updated target of 1.2m new homes over five years, the national cabinet has agreed.
The prime minister, Anthony Albanese, announced on Wednesday that the incentive payment will give jurisdictions $15,000 for every home delivered above the old target of 1m homes over five years from July 2024 in a bid to boost supply and improve affordability.
The federal government will also provide $500m through competitive funding for local and state governments to help bring “well-located” new housing supply online by connecting essential services, amenities to support new housing development, or building planning capability.
Albanese told reporters in Brisbane that “supply is the key to putting downward pressure [on rent] and assisting renters”, along with a package of “sensible renters’ rights”.
As Guardian Australia revealed on Tuesday, the national cabinet has agreed to uniform national standards on renters’ rights, limiting rent increases to once a year and requiring a “genuine reasonable grounds for eviction” for termination mid-lease.
Those measures will improve renters’ rights in Western Australia and the Northern Territory, but the Greens have already warned they will do nothing to prevent “unlimited rent increases”.
The ongoing dispute about a cap or limit on rent increases means Labor’s $10bn housing Australia future fund, which pays out at least $500m a year for social and affordable housing, is still not guaranteed to pass the Senate.
Albanese said the renters’ rights changes “will make a tangible impact for the almost one-third of Australians who rent”, including minimum rental standards.
According to national cabinet documents these include a stovetop in good working order and hot and cold running water.
Jurisdictions also committed to implementing a ban on soliciting rent bidding, and to consider options for better regulation of short-stay residential accommodation.
National cabinet agreed to a national planning reform blueprint with planning, zoning and land release measures to improve housing supply and affordability.
These include promoting medium and high-density housing in well-located areas close to existing public transport connections and streamlining approval pathways.
In June, Albanese announced a $2bn social and affordable housing accelerator, for which states and territories have provided a detailed implementation plan setting out how many dwellings they intend to build.
Albanese noted the federal government does not control land release, zoning or approvals so there are “limits to what the commonwealth can do” on housing supply.
After months of rejecting the Greens’ calls to pay the states to limit rent increases, Albanese said the $3bn incentive payment “borrowed unashamedly from some of the Hawke government” reforms paying states to implement competition policy.
Asked about the Greens’ demands for a rental cap, Albanese said he had been “negotiating and talking with first ministers, not with minor parties”.
“You cannot say you support increased housing supply and vote against the housing Australia future fund.
“The Greens, as well as the Coalition and One Nation, who formed a no-alition in the Senate, need to get on board.”
Albanese noted that “no jurisdiction” believed a rental freeze would make a “positive difference”. “Indeed, we believe that will make it worse.”
Earlier on Wednesday the Greens housing spokesperson, Max Chandler-Mather, said that limiting rent increases to once every 12 months is “effectively no change for the vast majority of renters in the country”.
“An unlimited rent increase is still an unlimited rent increase,” he told ABC TV, arguing that the prime minister and Labor premiers should “take responsibility for every rent increase that happens” after refusing caps.
National cabinet will meet again in November to discuss health reform and funding.
