Government To Increase Homebuyers Grant To Spur Construction Industry

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The government has announced it will modify the home buyers’ grant to include renovations and modifications to existing dwellings in the hope it will create jobs and economic activity in the struggling construction industry. 

There are a number of reports circulating that the government is set to implement a number of subsidies and incentives for homeowners to build or extend their house. 

Scott Morrison has said that the government is nearing completion of its new package, which could include up to $25,000 of grants; it’s expected that the government will announce specifics of the package some time this week. 

News.com.au writes that renovators “will have to match the ‘free’ cash by more than a dollar for dollar,” meaning that if $10,000 of the grant is used for a modification or upgrade, the owner must front at least $10,000 of their own money for the upgrade. 

It’s also expected that the grant will not be offered to those looking to work on their own dwelling, rather, it’s designed to spur economic activity in the construction industry and curve the unemployment rate for tradies. 

Scott Morrison said earlier this week that “we are more interested in larger projects and new home builds and things like that… we are looking at a bit of a drop off in that current home building that’s going on. That’s not good for tradies and not good for jobs,” he added. 

“A big part of coming out of the COVID-19 crisis in our infrastructure spending.” 

“The tradies and all the others – the apprentices and others who work in that home building sector are going to feel a lot of pain unless we can keep a continuity in the business with house construction,” Morrison said. 

Federal treasurer Josh Frydenberg is yet to confirm specifics of the package, but has stated that as many as 137,000 construction businesses – 80% of the total industry – have enrolled in the JobKeeper package. Frydenberg also briefed state treasurers last week on the fact that nationally, more than a million Australians are employed in the sector, and dwelling investments represent more than $100 billion – or 5% – of Australia’s GDP. 

“We recognise that it’s a long supply chain,” Frydenberg said. “It’s not just the sparkie and the plumber and the carpenter on the building site, it’s also the timber mill, it’s also the appliance manufacturer for the new kitchen. It’s also those who help with the materials that go into the bathroom.” 

Jason Clare, the shadow housing spokesman has said that tradies, employers and the industry have been calling for a support package for “a number of weeks” now. 

“We’ve known for weeks that the housing industry is expected to go off a cliff,” he said. “The forecasts are pretty terrifying,” Clare continued to explain. “Instead of 160,000 homes built this year, it’s now predicted that it could be as low as 100,000. Now, if that happens, tens of thousands of tradies will lose their jobs,” Clare concluded. 

We reported last week on the call from Master Builders Australia for the government to inject $13 billion into the struggling sector, stating that a government intervention could save more than half a million jobs, and add more than $30 billion to the economy over the coming years. 

While Master Builders Australia was looking for a grant of around $40,000 per household to construct a projected 130,000 dwellings before the end of the 2021 financial year, the government looks set to offer a grant of around half this size. 

Denita Wawn, CEO of Master Builders said that “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,” she said. 

Fairfax’s Rob Harris cites a report from the Australian National University’s team of economists who found that “stimulating the construction and manufacturing sectors would generate the largest positive spillovers for the rest of the economy in the post-pandemic recovery.” 

The same report quotes associate Professor, Sara Bice who said that this represents a “golden opportunity” to focus on Australian workers and grass-roots organisations in the recovery, which reduces the economic uncertainties and streamlines the delivery of projects – as well as jobs in the immediate future. 

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