With billions in planning, focus now on budget delivery for the Illawarra

A centrepiece of NSW Treasurer Daniel Mookhey's second budget is a multibillion dollar package of funding for social and affordable housing and the return of the government to building housing for the state's most vulnerable.

Housing Trust CEO Michele Adair said it was the first time in her seven years at the helm of the Illawarra-based social housing provider that there was hope for the thousands of people on the social housing waitlist in the Illawarra.

"The investment announcements, the billions of dollars, are the sort of numbers that we need to make a difference."

This was a theme echoed by interim director of Business Illawarra Paula Martin, who said the budget went some way to addressing the region's most pressing issues.

"More funding for social and affordable housing to start addressing the shortfall in the Illawarra Shoalhaven was also recognised with a focused set of funding priorities for the entire state," Ms Martin said, highlighting the half a billion dollars each for the Transport Oriented Development program, reforms to the plannings system and $655 million for essential worker housing.

"These are genuine game changers when it comes to getting workers housing close to where they work and play."

Kiama independent MP Gareth Ward said projects currently in planning, such as the Dapto on-off ramps and the East Nowra sub-arterial needed to progress to the construction stage, and there was more the government could do to alleviate pressures on small businesses.

"While today's announcements concerning payroll tax and bulk-billing GPs are welcomed, the government shouldn't stop there," he said.

"Payroll tax is a tax on jobs and so many small businesses are struggling to keep up."

A challenge for moving from planning to construction, particularly in the housing sector, will be the high cost of construction in the region.

Property Council Illawarra regional director Michelle Guido said already stretched private builders will have to contend with additional costs in the budget papers, including changes to the Emergency Services Levy and land tax indexation and foreign ownership surcharges.

"It's a massive cost for property owners and developers facing a once-in-a-generation housing supply and affordability crisis, a critical shortage of industrial land and low vacancy rates, and an already challenging development cost environment."

Ms Adair said she shared these concerns, with the Illawarra facing a challenge in terms of delivering on its housing targets.

"I do not have confidence yet that we're going to be able to meet the targets set by both the Commonwealth or the NSW government."