Many homebuyers will pocket savings from the cost-of-living support in the upcoming 2024 federal budget, which will include a boost for the home building industry in an attempt to unlock more supply.

Federal Treasurer Jim Chalmers will on Tuesday deliver a cost-of-living focused budget that he says won't contribute to inflation.

Housing supply will take centre stage amid concerns the government's flagship housing target of delivering 1.2 million new, well located homes over five years is falling out of reach.

Here’s what we already know about the budget in relation to housing.  

Boosting housing supply

Dr Chalmers has flagged there will be more action in the budget to tackle Australia's housing crisis, and in particular, the chronic shortage of homes.

"Housing will be a focus of the budget and for a range of reasons," he said on Wednesday.

"Primarily we don’t have enough homes in this country. That’s why we’ve got an ambitious but achievable target of 1.2 million new homes built in the five years from July this year."

So far, the government has announced $90.6 million of new spending in the upcoming budget to boost the number of skilled workers in the housing sector.

The federal government will spend $90.6 million to increase the number of skilled workers in the housing sector. Picture: Getty

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A shortage of skilled workers has been a major drag on the home building sector, with too few tradespeople available to build the homes needed for Australia’s booming population.  

The spending will go towards measures to help attract more apprentices into the industry, fee-free training, streamlining the visa program for in-demand trades and more.  

PropTrack senior economist Eleanor Creagh said the housing shortage was a central issue, with prices of homes at record highs, affordability at its worst in more than two decades and the rental market in crisis.

"Labour shortages have been a critical issue hampering the ability of the industry to deliver on new supply, so it’s encouraging that a reported $90.6m has been allocated towards boosting skilled workers in construction and housing," Ms Creagh said.

"However, with demand for housing remaining strong and measures to ease supply constraints far from imminent, the imbalance between supply and demand that has offset the higher interest rate environment and deterioration in affordability is expected to remain, fuelling further price rises."

Housing Industry Association managing director Jocelyn Martin welcomed the measures.

“One of the key issues in building these much-needed homes are having an adequate workforce and without this the Government will fall well short of its housing target," Ms Martin said.

“We recognise the challenges brought about by the lack of skills won’t be fixed overnight but it’s encouraging to see dedicated Government funding to help bring more workers into the industry.

Help to Buy

The worker funding boost comes as the government continues to negotiate the passing of its shared equity scheme through the Senate.  

Households have been feeling the pinch from high interest rates and cost of living pressures. Picture: Getty

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The Help to Buy scheme, which is facing opposition from the Coalition and the Greens, would see the government help Australians into home ownership by making a contribution of up to 40% of a home’s purchase price in exchange for a share, or proportional interest in the property. 

Tax cuts  

The biggest part of the cost-of-living relief in the budget will be the updated stage three tax cuts.  

Under the new version of the tax changes, all taxpayers will get a cut from July 1, with more of the benefit going towards low- and middle-income earners.  

The changes will lower the tax rate for lower brackets, while workers on the highest two tax brackets will see the threshold raised.

Federal Treasurer Jim Chalmers is set to deliver the 2024 budget on Tuesday May 14. Picture: Tracey Nearmy/Getty

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A taxpayer on an average full-time income of $98,217 will get a tax cut of about $2,134 compared to the previous year. 

There will be no change to the current tax-free threshold of $18,200.

Student debt relief  

Students struggling with rising rental costs will see some relief in the form of backdated changes to student debt, aimed at reducing the amount of interest paid on student loans.

Previously indexed to the Consumer Price Index (CPI), the measure will wipe out about $3 billion in student debt by instead indexing student loans to the lower of CPI or the wage price index, backdated to June 2023.

The changes will apply to HECS/HELP loans, VET student loans, Australian apprenticeship support loans and other student loans.  

About three million Australians hold a student loan. Picture: Getty

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It comes after students were whacked with a 7.1% interest hike due to higher-than-normal inflation last year, sparking a backlash from student debt holders already facing cost-of-living pressures. 

About three million Australians hold student loans, at an average debt of $26,500, and the measure would cut about $1,200 from their outstanding HECS/HELP debt this year.

Welfare and rent assistance 

Welfare recipients could receive a boost in support payments and rent assistance, the government has hinted.

Dr Chalmers said the government was taking “additional steps in the budget” for people who receive social security payments, but didn't specify what exactly.  

He said the government would adopt some measures called for by the Economic Inclusion Advisory Committee (EIAC), which made 22 recommendations including increasing Jobseeker payments and the rate of Commonwealth rent assistance. 

"Renters are under pressure in particular and that’s why... you can expect to see new initiatives in the budget on housing," Dr Chalmers said this week.

The government increased JobSeeker and related payments by $40 a fortnight in last year's budget, in addition to a rise in Commonwealth rent assistance. 

About 740,800 Australians were receiving JobSeeker payments, as of March last year. 

Super on paid parental leave 

Superannuation will be paid on government-funded parental leave, under a policy that’s already been announced.  

The expanded parental leave scheme will introduce 12% superannuation payments from July 1, 2025.

Infrastructure  

The government has also announced new infrastructure spending, with Western Sydney set for a $1.9 billion boost in funding towards 14 road and transport projects.  

The federal government has committed $1.9 billion towards infrastructure spending for Western Sydney. Picture: Getty

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There will be $100 million spent on building and upgrading bicycle and walking lines in cities and regional centres as well. 

Canberra will also get $50 million to extend its light rail line from the northern suburbs into the city’s south.