Federal treasurer Jim Chalmers handed down a Labor mini-budget on Tuesday 25 October with a massive boost for homebuyers.

The budget came the same week as inflation reached a new 30 year high of 7.3 per cent putting further pressure on the Reserve Bank to continue raising official interest rates.

A signature policy of Labor's first budget in nearly 10 years was a plan to build one million new homes by the end of the decade. The plan is designed to help alleviate Australia's housing crisis and will be delivered in partnership with the states, private investors and the construction sector.

The federal government has committed $350 million over five years starting in 2024 to build 10,000 affordable dwellings. The states and territories are expected to deliver a similar number of new homes.

The budget documents describe the one million homes as "aspirational".

Director of KR Peters Peter Nicolls cautiously welcomed the government investment in new housing stock for low and middle income earners.

However, he said the ambitious plan would be a test of the construction industry which was already feeling the pinch from labour and material shortages.

"It is one thing to want to build more houses, but at the moment builders are under enormous cost pressures as they try to fulfil contracts that were signed before inflation and the war in Ukraine started pushing up the cost of materials, energy and labour," Mr Nicolls said.

"The government would need to fast track land in the Urban Growth Zone by providing councils with additional resources to complete the Precinct Structure Plans (PSP). This will provide the additional land stock that will be needed to construct the dwellings."

In other budget measures, the government announced headline tax changes regarding the FBT exemption for electric vehicles and plug-in hybrids.

There were also moves to address tax avoidance by Multi-National Corporations. Mr Nicolls said Significant Global Entities (SGE) and Australian Public Companies will be required to increase their reporting of tax information on a country by country basis. SGEs will also have to report their approach to taxation to the ATO.

The government also signalled its intention to crack down on fraud, tax audits and tax compliance with an additional $1.8 billion for the ATO.

From 1 January 2023 penalties relating to Australia’s Foreign Investment fees on residential land will double.

Mr Nicolls said he was pleased that the underlying budget deficit would be lower than expected for 2022-23 at $44 billion, but that Australia still faced a huge interest bill that was hampering the government's ability to spend money on services and infrastructure.

"Economic growth is forecast at 3.25 per cent this financial year, that will slow in 2023-24 to 1.5 per cent," Mr Nicolls said.

"Inflation is still an issue here as it is around the world. The budget documents forecast inflation to peak at 7.5 per cent later next year. The Reserve Bank will not be happy until inflation is back in the 2-3 per cent range so unfortunately for mortgage holders, there will be more rate increases to come."

In September the inflation rate rose to 7.3 per cent, the highest annual rate since 1990, according to the ABS.

Most economists agree another .25 per cent rate hike will be announced on Melbourne Cup day. That would take the cash rate to 2.85 per cent, the highest since April 2013.

On Wednesday, the day after the budget, three of the big four banks increased their cash rate forecasts, with ANZ predicting the cash rate will peak at 3.85 per cent in May 2023.

Mr Nicolls said the government avoided making any substantial changes to the tax system in Tuesday night's mini-budget.

"There were no personal tax changes, and no comments were made regarding the taxing of trusts or the winding back of taxation concessions such as the small business CGT concessions and the CGT Discount. There were no announcements concerning changes to the treatment of loans to shareholders."

But for those wanting to downsize, there was good news as more people will be able to make Downsizer Contributions to Superannuation with the government reducing the minimum eligibility from 60 to 55.

Downsizer contributions allow people to contribute up to $300,000 (or $600,000 per couple) from the sale of proceeds of their principal place of residence that has been owned for at least 10 years.

Mr Nicolls said this would encourage more people to sell large family homes and buy smaller properties, giving them money to invest in superannuation and shares and enjoy lifestyle benefits such as travel.

"This is good news for the property sector as it should free up stock for buyers with children looking for a family home."