The carrot and the nudge: How Housing Minister Chris Bishop wants to rewire housing incentives

Money talks, says Housing Minister Chris Bishop, and he's banking on that incentive encouraging councils that consent more homes.

Appearing before the social service select committee this week, Bishop laid out the thinking between a raft of changes to housing, including housing growth and social housing rent.

“The broad government view is that rewarding growth is important, because money talks, and councils have argued for this for years and years and years," Bishop said.

Councils will receive a payment for infrastructure as an incentive based on a proportion of the national average new dwelling consent value. As part of Budget 2026, the Government allocated $400 million over four years for the Incentives for Growth Fund.

National MP Maureen Pugh asked how the scheme would work if it was oversubscribed.

Bishop said there was the funding cap, but it could be adjusted depending on how the scheme went.

“So payments are based on the national average residential building consent value, as well as the number of consents granted, and the number of existing dwellings in each council's territory, funding per consent is awarded with rates increasing with proportion of new dwellings to existing dwellings."

“The point is we're trying to design a system where it's relative to the existing houses that are already there, and if you get the rate of growth going… at a high rate, you get quite a lot more, so it's a progressive [system]," Bishop said.

The policy was designed to change the political economy of housing "so that councils see housing growth not just as a burden… but they actually gain a financial benefit out of that".

"It’s essentially a form of progressive incentives, so the harder you go and the more houses you get through, the better you do as a council. The more you do the more money there is."

Bishop said there was a range of work underway on national direction in the new planning system, with measures such as setting housing growth targets which they were "working out exactly what that looks like in practice, more mixed use up-zoning around transit corridors…"

Bishop was also questioned by MPs about the changes to social housing, which will increase the rent contribution - currently 25% of a social housing tenant’s income - to 30% in phases from April next year. That will see 84,000 households’ rent increase by an average of $31 a week.

Asked by Greens housing spokesperson Tamatha Paul why 30% of a person’s income was chosen, Bishop, referring to the previous proportion, said: “Don’t take this the wrong way, but why 25%?”

Paul responded saying it was due to “international measures that say 25% is affordable.”

“I'm not sure that's the rationale as to why government income related rent subsidy support is 25%, I suspect it's just a finger in the air, and that seemed like the right amount of money,” Bishop said.

“There's no particular science to it, we thought it was an appropriate amount to lift to create a more equitable system… And we felt that was appropriate.”

He said it was part of a suite of measures being worked on.

“It's not just about that, but it's about the social assessment system criteria, it's about looking at duration limits, it's looking at the criteria for support… so that people have the ability to leave social housing and be more independent. These things work together as a package to create a more sustainable social housing system.”

Later, Paul said they were trying to understand “who doesn't need to be in public housing.”

“Because I think we've got a good idea of who needs public housing, those for whom private housing isn't an option…”

Bishop said the work was underway.

“This reform journey around social housing is the next two to three years, and probably longer."

Bishop said he was upfront with people about not having all the answers straight away. 

“We will be engaging with the community housing sector, social sector more broadly, we're doing some active work at the moment around exactly what that looks like,” said Bishop.