Master Builders Australia (MBA) has released its Pre-Budget Submission, which calls for an extension of HomeBuilder, plus a further stimulus measure named CommunityBuilder which would inject a further $3.8 billion into the industry.
The submission points out that building and construction has the biggest economic multiplier effect in Australia, is the largest provider of full-time jobs, and contains the most small businesses within.
“That is why we are seeking stimulus measures across the entirety of the residential, commercial, and civil construction sectors,” the proposal reads.
“We want to see the Federal Government extend what has been the most effective government stimulus measure in a decade for an additional 12 months,” Denita Wawn, CEO of Master Builders Australia said.
“Despite the undeniable success of HomeBuilder so far, we have downgraded our forecast for the housing sector by 25 per cent for 2020/21 so that we are now predicting a 27 per cent fall in home building activity compared to 2019/20.
“This will be calamitous for many of the nearly 370,000 home building businesses that are vital to local economies and communities throughout Australia unless the Government steps in with extension of HomeBuilder and other stimulus measures.”
Modelling shows that a one-year HomeBuilder extension will cost $1.3 billion, boost GDP to $4.5 billion, create more than 4500 additional new jobs, create 6000 new homes, in addition to those already created through HomeBuilder.
MBA is also calling for a new stimulus measure named CommunityBuilder that would “employ the highly successful HomeBuilder model to kickstart work for the thousands of SME commercial construction businesses that employ hundreds of thousands of tradies around the country”.
“Our modelling suggests that an investment of $3.8 billion will deliver a boost of $6.8 billion to GDP and create 13,000 new jobs,” Ms Wawn said.
“A 12-month extension of HomeBuilder will boost GDP by between nearly $4 billion and $4.5 billion, create more than 4500 new jobs and result in up to 6200 new dwelling starts.
“Our call for these measures is backed up by our latest forecasts which show the sheer scale of the challenge our industry faces.
“Commercial construction activity is forecast to slump by 17 per cent. You will not see many cranes in the sky, and it will mean that thousands of businesses are at risk of simply exiting the industry along with the thousands of jobs that they provide.
“Our industry is facing a bloodbath, there is simply no other way to describe it. Private sector investment is evaporating, and the Government must step in to save businesses and jobs,” Ms Wawn continued.
“Residential and commercial construction respectively have the second and third largest multiplier effect in the economy which means a potentially disastrous day at the office for thousands of other businesses in the building supply chain and the broader economy.
“CommunityBuilder would involve the Federal Government providing grants to not-for-profit and local grassroots community organisations to help fund the construction of new facilities or the substantial renovation of existing ones,” Ms Wawn said.
“The Government could set the parameters at funding 25 per cent of projects costing up to $5 million and, like HomeBuilder, the beneficiary of the grants would need to put up the rest of the money and also receive additional assistance from state and local government.
“HomeBuilder has resulted in home builders having the best months in terms of sales in a decade and the positive impact on building approvals will be showing up strongly in months to come.
“CommunityBuilder would have the same effect and see new or enhanced community centres, libraries, school buildings and sporting facilities.
“Grant recipients having skin in the game would mean they would be highly motivated to ensure that builders provided value for money and a three-year window would ensure there sufficient competition to ensure costs don’t blow out,” Ms Wawn said.
“Our message to the Government is clear. Talk of supporting small businesses through the crisis and creating jobs will be for nothing if there is not a pipeline of work.”
Master Builders Australia top 5 budget priorities:
- Rebuild Australia through investment in building and construction that give back to the economy.
- Rebuild Australia by supporting business performance.
- Rebuild Australia by supporting people in the building and construction industry workforce.
- Rebuild Australia by improving procurement, planning and regulation.
- Rebuild Australia by appointing a Minister for Housing and Construction.
Underpinning the Top 5 are proposed fiscal and policy measures targeted to kickstart building and construction activity including:
- A 12-month extension of HomeBuilder
- Establish a CommunityBuilder grants scheme based on the highly effective HomeBuilder model to activate the construction of smaller community/not-for-profit facilities.
- Significantly reduce depreciation rates of capital works for investors in both residential and commercial property.
- Facilitate through new procurement models an increase institutional investment in social infrastructure including social housing and ensure that smaller and local businesses can tender to deliver government funded projects.
