States and territories will be offered financial incentives from a multibillion-dollar fund to boost housing supply, with national cabinet agreeing to increase the number of dwellings.

Prime Minister Anthony Albanese says 1.2 million new homes will be built over the next five years starting from July 2024, or 200,000 more than previously pledged as part of the national housing accord target.

Some $3 billion will be provided for the states and territories to build the dwellings, with Mr Albanese declaring the performance-based funding a genuine incentive.

“An additional 200,000 homes with $3 billion allows for an incentive of $15,000 per additional home, over and above the one million that had previously been agreed to,” he told reporters in Brisbane on Wednesday.

A $500 million housing support program will also be set up for local and state governments to start supply in well-located areas.

Leaders also agreed to a suite of rental reforms, which involve moving to limit rent increases to once per year and implementing minimum rental standards.

The reforms include developing a nationwide policy for a requirement for genuine reasonable grounds for evictions.

The Greens had opposed the federal government’s $10 billion Housing Australia Future Fund over a lack of support to renters, with the minor party calling for rent freezes.

Party leader Adam Bandt said the rental changes were not significant or meaningful.

“From now on, every unfair rent increase is Labor’s fault. Labor has every seat bar one at national cabinet and it’s now clear Labor’s policy is for unlimited rent increases,” he said.

“Labor is not spending nearly enough to address the massive public housing shortfall and with a $20 billion surplus up his sleeve, I call on the prime minister to deliver more at Labor’s national conference.”

The party’s housing spokesman Max Chandler-Mather said Labor had “basically enshrined the status quo, leaving renters exposed to astronomical rent increases once a year”.

But the prime minister said the Greens were standing in the way of new social and affordable housing.

“This is an initiative that shows how serious we are as state and territory governments across the political spectrum as well as the Commonwealth, understanding that supply is the key,” he said.

“You cannot say you support increased housing supply and vote against the Housing Australia Future Fund.”

Mr Albanese said moving towards nationally consistent laws would make it easier for renters.

National cabinet also agreed to a new national planning reform blueprint, which would look at planning and zoning measures to increase housing supply.

As part of the blueprint, medium and high-density housing would be promoted in areas close to public transport, while approval pathways would be streamlined.

Business Council of Australia chief executive Jennifer Westacott welcomed the move for additional housing.

“We agree there is an urgent need to fix planning systems that are restricting new housing supply and welcome the national cabinet’s focus on this,” she said.

“We also welcome funding to support infrastructure that facilitates housing delivery, which will also be critical in getting more housing built.”

But Better Renting executive Joel Dignam said little had been achieved for renters.

“Renters have been served up reheated leftovers but we are tired of eating the scraps from the master’s table,” he said.

“Without limits on rent increases, reducing the frequency could actually make things worse.”

Maeve Bannister and Andrew Brown
(Australian Associated Press)