Master Builders Australia has made a public call for the government to inject $13 billion worth of stimulus funds into the sector, as the industry feels the squeeze of the bushfires and coronavirus pandemic.
The MBA says that a $13 billion stimulus plan has the potential to spark $30 billion in new economic activity, and will create more than 100,000 jobs across the economy, at a time where the government is looking to get more people off the JobSeeker program and into the workforce.
You can read the MBA’s “Rebuilding Australia” report here, which used independent modelling from Ernst and Young.
The MBA says that if the government does not heed their call, Australia is at risk of losing 464,300 potential jobs in construction, 171,600 associated jobs in other sectors and forecasts the national employment rate could jump to 12%.
There are 1.2 million people in Australia directly employed in the construction sector, and the MBA says that their highest impact projection forecasts “a total loss in employment of 635,900.”
“Unfortunately, the high impact scenario may be playing out,” it said. “Current data from the Australian Bureau of Statistics identifies that nationally employment is down by 7.3% and in the building and construction industry by 6.5%.”
The MBA says EY’s modelling shows that there would be a $30.9 billion increase to Australia’s GDP as a result of the stimulus, as well as a $17.6 billion increase in expanded construction activity.
The first model projected by EY forecasted the impact of a $40,000 new home building grant, which it estimates will contribute $17 billion in additional economic activity, with $5.2 billion invested from the government. This would result in around 14,000 extra dwellings and employ 58,311 individuals.
The second proposal of a resilience renovation program would fund renovations to make homes more accessible and resilient in the face of a natural disaster would add $7 billion in economic activity in exchange for a $4 billion investment, and create 24,036 jobs.
The third project the MBA is pushing is directed at commercial projects, and produce $6.8 billion-worth of economic gains for $4 billion of government investment; it is projected to create 23,118 full-time jobs. This project looks to include funding for cladding and asbestos rectification, and would reduce developer charges by 10% and asks the government to increase spending in health, defence and education by 5%.
Denita Wawn, CEO of Master Builders says she is seeking stimulus, rather than subsidies from the government to spur economic growth in the sector, adding that she intends to pressure the National Cabinet to “implement this independently modelled stimulus package and establish a special task force to fast track commencement of construction activity.”
“Building and construction is shaping up to be one of the industries worst hit in the long term by governments in response to the public health emergency of COVID-19. We are asking our political leaders to show the same courage and vision in supporting our industry as they showed in responding to the health emergency.”
“Work for builders and tradies in 2020/21 is fast evaporating and the indications are that 2021/22 will not be much better. There is no time to spare in meeting this threat to the viability of nearly 400,000 building businesses and the jobs of 1.2 million people employed in our industry,” Wawn added.
“We also want to see a dedicated building and construction industry taskforce established to oversee the implementation of the stimulus action plan. For a stimulus to occur, building activity needs to commence. Builders and tradies cannot sustain their businesses and jobs on promises. We have seen that governments can fast track activity in response to natural disasters and COVID-19 is shaping up as an economic disaster,” Denita Wawn concluded.