The federal government has unveiled a new $25,000 grant to renovate or build new homes in an effort to give the construction industry a much-needed boom.
It’s been called the HomeBuilder grant, and is aimed at propping up the construction industry with a package of around $688 million, which the government hopes will translate into 27,500 people applying for the grant.
There is a catch, however. Homeowners will only receive the grant if they front $150,000 of their own cash for a building or renovation project. The government has said that the HomeBuilder program will be means-tested, with a couple making more than $200,000 or an individual making more than $125,000 a year won’t be eligible for the grant.
The construction of new buildings will be capped at $750,000, and renovations can be anywhere between $150,000 and $750,000, however the grant will only be offered for renovations on a dwelling valued at less than $1.5 million. Installation of facilities like sheds, tennis courts or swimming pools will not be eligible for the program, as the modification or construction needs to be attached to the main property.
As well as this, investment properties are not eligible for the HomeBuilder grant, nor will homeowners looking to upgrade their house without the use of accredited builders.
The grants will be made available from today, and will be accessible for the remainder of 2020.
The government has also said it has addressed concerns from industry bodies that the grant program could enable “cowboys” to enter the construction market without the requisite health and safety precautions being taken.
In order to complete jobs eligible for the HomeBuilder grant, builders will need to have been licensed and registered before today’s announcement.
Prime Minister Scott Morrison has said that the grant program will save the construction industry from the brink of disaster, and save thousands from losing their job.
“This is about targeted taxpayer support for a limited time using existing systems to ensure the money gets used how it should by families looking for that bit of extra help to make significant investments themselves,” Morrison stated.
“If you’ve been putting off that renovation or new build, the extra $25,000 we’re putting on the table, along with record-low interest rates, means now’s the time to get started,” he added.
Opposition leader, Anthony Albanese has questioned the accessibility of the program for Australian households, considering an individual must invest $150,000 of their own money to receive the $25,000 grant.
“Most people don’t have $150,000 in the current climate,” Albanese said, adding that “people are concerned about their economic security, we’ve just gone into a recession after 29 years of growth,” he said.
In reference to the hefty sum, Federal Housing Minister Michael Sukkar said that the government wants “people to have skin in the game.”
“Our expectation is that many thousands of Australians will use this as an opportunity,” he said, adding that “our advice from the industry and Treasury is this will be the catalyst for many thousands of Australians to make that decision to embark upon a renovation.”
Labor’s Tanya Plibersek has said that the government’s HomeBuilder program fails to address what she believes are more important issues like further government investment in public housing.
“We also need to use this opportunity to invest in emergency accommodation that can be a refuge for our most venerable people – mums and kids escaping domestic violence, veterans sleeping rough in parks, it shouldn’t happen in Australia.”
Denita Wawn, chief executive at the Master Builder’s Association has thanked the government for the grant program, saying that the package “provides a huge relief,” and could save as many as 40% of building contracts moving forward.
“We’ve been receiving a large number of calls of very concerned small business owners that don’t want to put off employees, they don’t want to tell subcontractors ‘there’s no work’,” Wawn said.
She did warn, however, that further assistance may be required to save the industry if the economic downturn of the pandemic continues. “The problem is that we all have a level of uncertainty of just how big the economic downturn is going to be, and how long it’s going to go for,” she added.
Jason Clare, Opposition housing spokesperson has said that the government’s package wasn’t large enough to deal with the economic realities in the construction industry. “All the modelling indicates that a package like this is not going to reverse that downturn… that means a lot of people could find themselves in a lot of trouble, and [for] a lot of tradies, the only thing they’ll be building is a longer line out the front of Centrelink,” he added.
Earlier this week we reported on the pressure from environmental groups put on the government for the grant program to incentivise sustainable building practices, as well as increase the thermal efficiency of newly constructed buildings. This was in addition to a report on the government’s intention to launch the grant earlier this week.