Federal Budget 2025 - Quick guide for the built environment
The 2025 Federal Budget continues to focus on infrastructure development and housing funding, with significant investments to address housing availability and affordability challenges. This guide summarises key funding and initiatives that may directly or indirectly relate to expenditure on new capital works projects to help your business plan for the future.
Housing
Addressing housing supply
The Government continues its commitment to achieving 1.2 million new, well-located homes over a 5 year period, with further investments building on existing commitments:
Housing Australia Future Fund (HAFF): The $10 billion fund established previously aims to deliver 30,000 new social and affordable homes within its first five years. Combined with other initiatives, the Government is supporting 55,000 social and affordable homes over the next five years.
Housing Support Program: The Government has committed $1.5 billion to state, territory and local governments to fund projects that improve planning capability and deliver enabling infrastructure such as roads, water and power, as well as build more social housing.
New Homes Bonus: The Government is offering $3 billion in incentive payments, bringing the total commitment up to $4.5 billion for states to address infrastructure backlogs and reduce barriers to new housing.
Build-to-rent
The Government is implementing tax measures to support greater investment in build-to-rent developments and increase the supply of affordable tenancies. Industry estimates indicate these changes may support around 80,000 new long-term, stable and secure rental homes in Australia over the next decade.
Health & Education
Health investment
As part of the Government’s Strengthening Medicare budget initiative an investment of $644 million over three years from 2025-26 will enable the establishment of an additional 50 Medicare Urgent-Care Clinics, bringing the total number of these facilities up to 137 nationally. It has been indicated that this will include 14 new clinics in NSW, 12 in Victoria, 10 in Queensland, 6 in WA, 3 each in SA and Tasmania, and 1 each in ACT and NT, with the intention for these to be in operation before mid 2026.
In addition, the budget has committed $28 million over 3 years for the construction of the Nursing and Midwifery Academy in Victoria.
Building Early Childhood Education Fund
As part of the Government’s $5 billion investment in building a universal early childhood education and care system, this year’s budget commits $1 billion to establish the Building Early Education Fund. This fund is intended to increase the supply of high-quality early childhood education and care places across Australia, with the aim of supporting approximately 160 new or expanded early childhood education and care services in priority areas of need such as the outer suburbs and regional Australia.
TAFE and skills funding
Several initiatives will support the development of new education infrastructure:
The Government has introduced legislation to make permanent 100,000 free TAFE places every year from 1 January 2027.
Between January 2023 and September 2024, there have been close to 600,000 Free TAFE enrolments, with almost 40,000 of these in construction sector courses.
Construction workforce initiatives
The Government will double the current maximum incentive payments for eligible housing construction apprentices from $5,000 to $10,000 from 1 July 2025, supporting Australians through their training and boosting the construction workforce.
Infrastructure
The Budget continues to refocus the over $120 billion 10-year infrastructure investment pipeline on nationally significant road and rail projects that will improve productivity, resilience, liveability and sustainability of cities, regions and communities.
The Government is providing $17.1 billion over ten years from 2024-25 for new and existing road and rail projects as part of the Infrastructure Investment Program, including:
$2 billion to upgrade Sunshine Station (VIC)
$1 billion for the Road Blitz with the Victorian Government
$1 billion towards supporting the South West Sydney Rail Extension
$350 million for the Kwinana Freeway upgrades in WA
$200 million for the upgrades to Arthur Highway in Tasmania
$200 million for the duplication of the Stuart Highway from Darwin to Katherine
Since the Mid-Year Economic and Fiscal Outlook (MYEFO), the Government has announced a $7.2 billion investment in the Bruce Highway - Targeted Safety Package, enhancing a critical transport route through Queensland.
Competition and productivity reforms
The Government is implementing a revitalised National Competition Policy (NCP) with a landmark 10-year reform program, underpinned by the $900 million National Productivity Fund to reward states and territories for agreed reforms that promote competition. The following key initiatives are particularly relevant to the built environment sector:
Commercial planning and zoning reforms
The Government has committed to streamlining commercial planning and zoning as part of the first tranche of priority NCP reforms. This initiative aims to:
Improve competition in the retail and commercial sectors by removing unnecessary barriers to business entry and growth
Create new opportunities for business establishment and expansion in commercial zones
Help lower prices faced by consumers through increased market competition
Reduce regulatory burdens for businesses seeking to establish or expand operations
Enhance the efficiency and responsiveness of planning systems across jurisdictions
In the Mid-Year Economic and Fiscal Outlook (MYEFO), the Government committed to this reform under the revitalised National Competition Policy, recognising that restrictive zoning and planning regulations can limit competition and contribute to higher prices. This initiative represents a significant opportunity for commercial developments and may influence future project pipelines and land values.
Modern methods of construction
The Government is taking concrete steps to level the playing field for modern methods of construction, recognising their potential to increase housing supply and improve construction productivity. This includes:
Investing $54 million specifically to accelerate the uptake of modern methods of construction, including $49.3 million to support states and territories to scale up existing prefabricated and modular housing construction projects and $4.7 million for the development of a voluntary certification and rating scheme for prefabricated and modular housing manufacturers
Allocating $120 million from the National Productivity Fund to incentivise states to remove red tape that currently prevents wider adoption of these methods
Working with states on reforms to remove regulatory barriers that disadvantage innovative construction technologies and methodologies
Supporting increased use of prefabrication, modular construction, and other advanced building techniques
Creating a more competitive environment for construction innovation
These initiatives complement other housing measures in the Budget and aim to help more homes be built faster and more efficiently, contributing to the Government's target of 1.2 million new homes over five years.
By addressing both planning/zoning restrictions and construction method innovation, these reforms present significant opportunities for businesses in the built environment sector to adopt new technologies, expand into new areas, and potentially reduce construction timeframes and costs.
Sources: Statement 1: Budget Overview, Budget Measures - Budget Paper No.2, The Urban Developer - Federal Budget 2025: What Developers Need to Know