In its new housing proposal, released on Wednesday, the ACTU has urged federal and state governments to agree to a public housing target of one in 10 new homes, compared to the current rate of one in 50.
That's a similar rate to what was achieved under former prime minister Bob Hawke in the 1980s and can be attained by using modern methods of construction such as modular housing, ACTU president Michele O'Neil said.
While it would require a massive increase in investment, the benefits would be worth it, she said.
"When you look around the world, every country that has supported significant increases in public housing sees the benefit multiple times over," Ms O'Neil told AAP.
"It has that impact on people being more secure, you have less homelessness, you also have less excessive rent hikes in the private market, because the stock is increasing."
When asked if he was open to the union's suggestion, Treasurer Jim Chalmers said the federal government already had measures in place.
"We've already got our plans to make sure that, as we build more homes in our communities, that a portion of that is social and affordable homes," he told reporters in Canberra.
"The best way to put downward pressure on rents over time is to build more homes, and also to help more renters become first home buyers."
Deputy opposition leader Jane Hume said the proposal from the ACTU was not in the union's remit.
"The ACTU should stick to its knitting," she said.
"They have an important job to do, and that is to make sure that workers in Australia are well looked after and well represented."
The unions are targeting publicly-owned housing specifically, rather than social and affordable housing - a vague term which can include private landlords receiving government subsidies to rent out homes at below-market rates.
While getting access to affordable housing was a lifeline for Lou Housego, 69, after escaping from an abusive marriage, it didn't solve her affordability problem.
When she was finally offered a place in Sydney, the rent would still have set her back $650 a week at 75 per cent of market rate, forcing her to delay her retirement and move to Wollongong to find a home she could afford.
"I think we should be putting a huge amount into public housing," she said.
"Housing should be a right, not a privilege.
"The things that are important for a society to function - security of food and safety in housing - are the absolute baselines."
Ms O'Neil said public funding too often ended up supporting "affordable" housing that was out of reach for working people.
While the government was spending a lot of money on social and affordable housing, including the $10 billion Housing Australia Future Fund, she questioned whether it was the best use of funds.
The ACTU also wants stronger rental protections, including a national standard lease of two years, from the current 12 months.
In a speech to the National Press Club earlier in August, opposition housing spokesman Andrew Bragg called for more direct investment in public housing rather than social and affordable housing.
"There's nothing wrong with public housing, and there is a case to be made that public housing can be cheaper than the social and affordable route," he said.
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