If this is designed to increase the housing stock in outer suburbs then it may ultimately (if it works which I doubt) bring down house prices, or increase affordability if you like. Not so good as the effects will be felt mostly in outer suburbs where house prices are already shaky.
They would be better off to spend the money making the outer suburbs more desirable to live in - better public transport, jobs (relocate public service offices) etc. Then the demand and supply would look after itself.
