Veteran ABC economic analyst Alan Kohler says the Albanese government has failed to bring in the most obvious fix to remedy Australia’s housing crisis.

He said Labor needs to dramatically increase housing supply - but admitted: 'That's about as likely as my last bright idea of nationalising childcare.'

The TV finance expert says the government needs to look again at boosting public housing in a bid to tackle the growing problem.

'Back when housing was affordable, public housing was an important part of the mix,' he said.

'Whitlam tried to restart it after Menzies slashed it, but the states resisted, and since then, federal governments have exited public housing.'

Alongside proposed changes to negative gearing and the CGT discount for investment properties, the government will commit $2billion over four years for local infrastructure, such as roads, sewerage, and electricity, to unlock new housing developments.

The government estimates the funding could support up to 65,000 new homes over a decade, though not through direct construction.

However, Kohler said it was time for the government to do more than dish out cash and targets to state governments and local councils under the National Housing Accord which aims to build 1.2million new homes by 2029.

'Housing commencements in the December quarter were 26.1 per cent above the year before, at 53,567,' he said.

'But that just gets quarterly starts back to where they were before the housing accord was signed.

'To be on pace to meet that [Housing Accord] target, 420,000 should have been built by the end of March. 

'To hit the five-year target, the quarterly run-rate now has to rise almost 50 per cent - and the Iran war just made it harder by increasing the price of building materials and diesel.'

He added there were also other broader challenges including a shortage of tradies, low productivity, and ongoing issues with zoning and NIMBYism. 

The cost of building homes has also increased by 4 per cent on average due to the closure of the Strait of Hormuz, according to Commonwealth Bank economists.

They estimate that will mean 15,000 fewer dwellings will be built by mid-2029.

AMP economist Shane Oliver said this week’s Federal Budget carried higher stakes than almost any in recent years, with intergenerational equity emerging as one of the government’s defining economic and political challenges. 

'So far all that’s been talked about on this front are measures to curtail the capital gains tax discount and negative gearing and the minimum tax rate for trusts,' he said.

'I can’t see how these will improve intergenerational equity. 

'Older generations have got the benefit of these tax concessions to grow their wealth and now they are being curtailed for the young.

'What’s more the property tax changes won’t fix the undersupply of housing.'

Mr Oliver said the key ways to improve intergenerational equity are to boost productivity growth so living standards grow at the rate enjoyed by older generations while getting the housing balance right with more supply and less immigration.

The Canadian government cut migration by 90 per cent from its historic peak in 2023, which saw an 18 per cent fall in house prices. 

However, Kohler warned many factors contributed to Canada's dramatic fall, including official interest rates rising from 0.25 to 5 per cent and widespread labour shortages.

'In Australia, net overseas migration is already falling,' he said.

'In 2024-25, it was 306,000, 129,000 less than the previous year, but Treasury's forecast in the last budget of 260,000 for this year and 225,000 next year looks out of reach.

'In the September quarter, the latest data we've got, it was 87,800, 7.9 per cent higher than the previous year, and an annual rate of 348,000, so this year is off to a bad start.'