Australia entered its first recession in 29 years following a second consecutive quarter of GDP shrinkage to the end of March, halting a decades-long run of prosperity for the nation. The ‘conjoined catastrophes’ of the bushfires and COVID-19 pandemic has left the market needing a significant and far-reaching stimulus from the government to preserve jobs and get things moving again.
The Construction sector is going to be just as key to the recovery efforts in our country as it has been to the sustained growth we have enjoyed. Demonstrating their understanding of this, the government recently announced the HomeBuilder initiative which will pump $680 million into residential construction projects to stimulate jobs, development and trade to weather the economic storm.
We’ve broken down the key elements of the initiative and it’s intended impact, below.
The Housing Industry Association has predicted a potential 50 per cent drop off in new build projects in the second half of 2020, making not only the value of the new program important but also the timeframes that have been stipulated. To ensure a speedy start, owner-occupiers taking up the scheme must have signed up with a registered builder before December 31st and the works must commence within three months of the contract being signed.
As this is a scheme to stimulate the residential market, no commercial property types are eligible, however, all dwelling types (houses, apartments, land package, off-the-plan, etc) will be considered, provided other conditions for the grant have been met.
There are several stipulations for a successful application, here are the key points:
- For new build projects, the total value of the property (house and land) must not exceed $750,000.
- For renovations to existing properties, the required contract price range must lay between $150,000 and $750,000, and the value of the property before the renovation cannot exceed $1.5 million.
- Renovations can only be made with regards to accessibility, safety and liveability, and must be a material part of the main building. This stipulation rules out ‘luxury’ home improvements such as swimming pools, tennis courts, outdoor spas and even garages.
The government pledge of $680 million is based on an estimate of the number of applications expected from eligible citizens that meet financially assessed criteria, the anticipated uptake is around 27,500.
In addition to satisfying property and project eligibility, individuals must also meet the following criteria.
- Recipients must be using the grant to top up a project in which they are already committed to spending $150,000
- Income not exceeding $125,000 per annum for an individual based on 2018-19 tax returns or Income not exceeding $200,000 per annum for a couple based on both parties’ tax returns.
The Intended Impact
Danita Wawn, CEO of Master Builders stated in the run-up to the announcement of the plan “any stimulus package at the moment is focussed on jobs” and it is easy to see why the Construction sector has received the attention it has. As of 2019, 1.15 million Australians were employed in the Construction sector, equating to around 9% of the total workforce. This scheme has been slated to support and safeguard around 14,000 jobs in the near term with an anticipation that the initiative can also help to support several indirect job types and sectors whose fate is intrinsically linked to ongoing activity in residential construction.
With a 20-year track record of providing staffing services to the Australian Construction sector, we are well placed to be able to assist employers to recruit skilled workers across a variety of disciplines as they look to respond to opportunities which the scheme is set to create. Contact a member of our team today to learn more about our candidates and services.