Treasurer Jim Chalmers will confirm details surrounding the plan when he delivers his first budget on Tuesday night.
The federal government has already pledged $10 billion to its Housing Australia Future Fund, which it says will deliver 30,000 social and affordable homes in the next five years.
Chalmers said reaching the one million homes target would tackle one of the biggest challenges facing the nation and its economy.
“As I go around Australia speaking with local communities, employers and workers, one of the big challenges we have in our economy is we’ve got these jobs and opportunities being created, but it’s becoming harder and harder to live near where those job opportunities are,” he told ABC Radio.
“I’ve been working really closely and really hard with superannuation and other investors … with the building and construction industry, and with the union movement, to see what we can do to shift the needle on affordable housing.”
Chalmers said he would unveil the timing for achieving the target in Tuesday’s budget.
Shadow treasurer Angus Taylor said it was important to boost housing supply but said superannuation should not be used for the government’s pet projects.
“Superannuation is there for people’s retirement, a nest egg that they can rely on so that they can have a prosperous retirement,” he told reporters.
Figures released ahead of the budget show the bottom line will look rosier than expected.
The deficit for 2022/23 is forecast to hit $36.9 billion, less than half the $78 billion forecast in the March budget delivered by the coalition government.
High commodity prices and strong employment are anticipated to keep propping up the public purse, although this boost to revenue is expected to start slowing down after two years.
Prime Minister Anthony Albanese said the government had managed to find billions in savings in the budget.
“We have been diligent and gone through line by line, to make sure this budget makes sensible investments but also removes some of the waste,” he told reporters.
But Chalmers said the $548 billion to be spent on health and aged care across the next four years was one of the huge pressures on Australia’s budget.
He said he hoped Labor’s renewed focus on health would drive down soaring GP wait times.
“We want to take pressure off emergency departments, we want to strengthen Medicare, we want to fix the crisis in aged care,” he said.
The budget, to be delivered in parliament by Chalmers at 6.30pm Queensland time, will also flag new measures of “wellbeing” and outline a package of support for women.
Alongside aged care and health, disability services and defence are expected to be the biggest areas of spending.
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