The government has established a working group to examine new ways to increase investment in affordable housing.

Andrew Tyndale, a former Macquarie Bank investment banker, is proposing that Australia's $2 trillion worth of superannuation could be tapped to build affordable housing, according to The Financial Review.

Tyndale, now director of not-for-profit, aged-care housing provider, Grace Mutual, says he wants to establish the Affordable Housing Financing Corporation, from which the superannuation industry could buy $2.5 billion worth of bonds. Those funds would be used to finance the construction of 10,000 new homes. The federal government would make coupon payments on the bonds worth $1 billion over a decade.

"Australia's stock of social and affordable housing is old and inadequate," said assistant minister to the Treasurer, Alex Hawke, who is leading the working group. "The government is working with the states, private and not-for-profit sectors, through the affordable housing working group, to find new and better ways of financing social and affordable housing," he told The Financial Review.

"Affordable housing is such a significant problem for Australians that the government must develop a policy to address it, and we believe a supply-side initiative remains the most attractive option," said Tyndale.

Federal Minister for Social Services Christian Porter is said to be interested in the model, as are superannuation funds including First State Super, Cbus, and Hesta, according to The Financial Review.

The working group is expected to report on its findings in the middle of the year.