Housing affordability is a perennial issue in Australia. Housing prices relative to income have skyrocketed, and home ownership has declined by five percentage points over the last decade. Home ownership is now so out of reach that two-thirds of potential homebuyers think that the only way they will be able to afford to purchase is if they receive an inheritance. Those who cannot afford to buy are trapped in the rental market, where they face skyrocketing rents for low-quality, insecure housing.

Yet while Australians face the toughest housing market in generations, the Government focused on band-aid solutions – opting to leave the big structural issues untouched.

The biggest budget-night announcement was a 15% increase to the maximum rates of Commonwealth Rent Assistance. This is the most significant increase in over three decades and will provide welcome relief for 1.1 million households who are projected to be better off under the scheme.

However, while the headlines make this increase look big, the reality is that the maximum rate for a single person without children will only top out at $90.39 per week – far short of the median rent. The problem is that the payment was so low to begin with, and with renters facing a 11% average increase over the last year alone, this modest raise simply plays catch-up with the market.

The Housing Australia Future Fund is another big-ticket housing affordability item. The Fund aims to leverage $10 billion in investments to fund affordable housing provision. It will run in perpetuity, meaning that returns on the Fund will be invested into housing subsidies each year – contingent, of course, on the Fund continuing to make a profit. The Government expects that the project will deliver 30,000 affordable homes over five years.

But the Fund’s investments are subject to market volatility and an uncertain economic outlook ahead, so its contribution to housing affordability cannot be guaranteed. The investments in affordable housing will also likely be too small to deal with the enormity of the crisis. With only 1.5% of dwellings currently affordable for those solely on government payments, 30,000 affordable homes over five years looks like a drop in the ocean.

Other Budget items included a range of complex tax changes slated to increase housing affordability. Yet these measures are again too modest to see real increases in housing affordability. For example, the Government’s build-to-rent scheme will only provide $34.3 million over four years in tax rebates.

There were no reforms to Australia’s bloated system of tax concessions for investors, including to negative gearing or to the capital gains tax. These tax breaks make it easier for investors to outbid first home buyers and adds to the problem of rising house prices.

The Budget also continues to subsidise rents in the private market instead of directly investing in public housing. Direct investment in public housing takes people out of the rental market, instead of only subsidising their position within it, and would reduce reliance on the private market.

Housing policy in Australia is marked by decades of policy failure. Structural solutions to the housing affordability crisis are overdue. Increasing Australia’s stock of public housing and removing tax incentives for investors should have been top priorities for this budget. Unfortunately, the Federal Government chose instead to narrowly focus on measures that will fail to address the larger problems causing the housing crisis.