The Morrison Government is handing $25,000 cash grants to people to renovate their properties or build new homes under a new HomeBuilder scheme.
The scheme is designed to stimulate activity in the construction sector — one of the biggest employers in the country — but it comes with serious caveats.
The scheme cannot be used by anyone who'd just like to build a new patio, pool, tennis court or cheaply renovate their bathroom or kitchen.
Instead, to receive a $25,000 taxpayer-funded grant, you'll need to use the money to build a new home (which can't be worth more than $750,000, including land, on completion) or make expensive renovations to your existing home worth between a minimum $150,000 and a maximum $750,000.
And to qualify, you can't be earning more than $125,000 a year as an individual or $200,000 as a couple.
Prime Minister Scott Morrison says the scheme is designed to support more than a million workers, including builders, plumbers and painters, for the next nine months.
But Labor and the Greens say the scheme is far too tightly targeted to provide the stimulus required to support the construction sector properly.
The social-housing sector has also slammed the policy for failing to provide for people who really need a roof over their head.
"This package is one tenth of the size of what the Rudd government rolled out in the GFC and it's arguable that the economy and the construction sector is in a far worse situation now than then," Labor's housing spokesman Jason Clare said.
What's the point of HomeBuilder?
Australia's economy is in recession — possibly the worst recession in 90 years.
The Morrison Government wants to stimulate economic activity to prevent the recession getting worse.
One way to do that is to support parts of the economy that employ lots of people, and the construction industry employs nearly one in 10 workers.
Treasury officials are forecasting a shortfall of 30,000 new dwelling commencements for the second half of 2020, so the Government has come up with the HomeBuilder scheme to address that shortfall and keep more people in jobs.
The scheme is time sensitive — it's designed to support building activity over the next nine months.
So if you meet the eligibility criteria, you'll have to apply for the $25,000 grant between now and December 31, with the work contracted to start within three months of the contract date.
Will it work?
The scheme is forecast to cost taxpayers $688 million. But it is uncapped, so its final cost will be determined by how popular it is — it may cost more, it may cost less.
The Government estimates the scheme will fund about 27,520 projects (at $25,000 each).
"This investment isn't just about helping Australians bring their dream home to life, it's about creating jobs and helping support the more than 1 million workers in the sector including builders, painters, plumbers and electricians across the country," Mr Morrison says.
However, questions have been raised about how effective the scheme will be.
According to industry feedback, the tight eligibility criteria mean most projects funded by the scheme will be new home builds, rather than renovations.
"While off-the-plan apartment sales are eligible, the short timeframe of the program suggests that detached house building, rather than multi-unit dwellings, will be the main beneficiary," ANZ economist Felicity Emmett said in a note to clients.
But what about social housing?
The Australian Council of Social Service (ACOSS) has also criticised the scheme, saying the plan to provide large grants to home builders and renovators is a wasted opportunity.
"There is no argument that the construction sector needs a shot in the arm, but this money will not go where it is most needed," ACOSS chief executive Dr Cassandra Goldie said.
"It will largely benefit those on middle and higher incomes undertaking costly renovations, without any related social or environmental benefits.
"We have a massive shortfall of social housing and there is clear agreement from Master Builders Australia, the CFMEU and community groups for a national social housing construction program of about 30,000 homes.
"We must work together to get out of this recession, not leave people behind and out in the cold without a home."
Modelling conducted by EY on behalf of the Master Builders Association, and which was provided to Government, showed a $40,000 new home building grant would specifically see 14,000 new homes projects put back into the construction pipeline over the next year.
Graham Wolfe, the managing director of the Housing Industry Association, said he hoped the HomeBuilder scheme would be the first of a number of housing policies.
"I do have hopes, and almost hopes and prayers, that the Government does see the value in generating measures that will include additional social housing and housing projects on the ground," he told the ABC.
"I'd be confident those conversations are going on."
Mr Wolfe said the states and territories could also do more to boost housing activity.
"The states can be looking at how they can relieve some of the costs involved in stamp duty if it is a new house, payroll tax, supporting apprentices with relieving some of the cost in hiring apprentices," he said.
And Greens leader Adam Bandt has labelled the $25,000 a "granite bench top grant," saying the HomeBuilder scheme would use public money for private benefit and potentially make the homelessness crisis worse.
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2020-06-04 20:11:29Z
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