This proposal won't get put into legislation, its just noise from the Liberal Party, (which are the conservative party in Australia).
Where people rent housing from the government, (government owned public housing), the government can do what they want with the properties. If people own the property, they cannot be forced to subdivide, or forced to leave their homes.
Renters, of any age, in Australia, have some rights when it comes to being evicted from properties they occupy, but ultimately, if the landlord, in this case the government, wants the property vacant, they have the right to demand this,regardless of how long the tenant has been in the house, or the age of the tenant.
It may seem heartless, and IMO is heartless, but the conservative government is only interested in money, not the welfare of the elderly. If they can turn a quick dollar, by ousting people from valuable properties, that the government own, they will.