The federal government is considering giving householders cash grants for home renovations, under a multi-billion dollar stimulus package to boost the economy.
Prime Minister Scott Morrison will likely announce a fourth cash splash aimed at saving the jobs of 1.2million tradesmen later this week, The Australian reports.
It comes after the COVID-19 pandemic crippled the housing construction industry and cost an estimated 60,000 builders their jobs.
Construction of new homes plummeted throughout the crisis along with most other economic activity – and authorities fear it will be slow to revive.
The $4billion cash grant scheme would encourage homeowners to make changes to their properties and provide tradesmen with immediate work.
But there would be limits on the type of renovations that could be undertaken under the plan.
Homeowners could soon be given cash to renovate their homes under a new government stimulus package to stave off a coronavirus-induced construction industry collapse. Pictured: Home renovators Josh Barker and Elyse Knowles
Construction of new homes has plummeted during the coronavirus pandemic along with most other economic activity and is feared to be slow to revive. Pictured is a new build house at Toongabbie in Sydney’s west
Master Builders Australia chief executive Denita Wawn said the proposed package would save small businesses from a potential catastrophe.
She said the addition of renovations in the scheme – which also plans to broaden the first home buyers allowance – bypasses ‘the red tape’ of requesting planning approvals.
Treasurer Josh Frydenberg is expected to confirm the details of the scheme, which will also include a clause to help pay deposits for building new homes, Sky News claimed on Sunday.
Home auctions and inspections have only just been allowed for the first time in more than two months and are still subject to many restrictions.
More than a million people have also lost their jobs, taken pay cuts, or fear they could be next, and are in no position to take out a mountain of debt.
Homebuyers may be handed thousands of dollars to build houses as the government desperately tries to stave off a construction collapse that would cost many jobs
Despite already spending well over $300 billion on coronavirus stimulus packages, the Federal Government is tipped to splash more cash to tackle this.
Grants of up to $10,000 have at various times been offered by the states, but only to first homebuyers struggling to own their first property.
The government’s plan is instead believed to be across the board – helping anyone constructing a new home.
As Australia’s population grows it needs more housing supply to avoid running out, so it is hoped giving an incentive to build will jump-start construction.
House prices would skyrocket if there was not enough ongoing construction, as well as thousands of jobs potentially lost.
Home auctions and inspections have only just been allowed for the first time in more than two months and are still subject to many restrictions
Registered bidders line up for the auction in Coorparoo, Queensland, after restrictions were relaxed there, but the industry still faces a long road back
Shadow Treasurer Jim Chalmers cautiously welcomed the claimed plan but wanted to see the details before giving it any support.
‘Already, before the crisis, construction was relatively weak and homeownership was at 60-year lows, so we had a challenge there,’ he said on Sky News.
‘That has been exacerbated by this coronavirus crisis. In two or three months, we are very worried that construction will fall off a cliff and that’s why we have been making very constructive suggestions about what the government might do.
‘We want to make sure that their plan is comprehensive, and we hope that they pick up and run with some of the ideas that (Labor has) put on the table.’
As Australia’s population grows it needs more housing supply to avoid running out, so it is hoped giving an incentive to build will jump-start construction
Dr Chalmers also suggested a program to help essential workers move closer to where they worked.
The claimed new stimulus appears similar to a proposal by the Property Council of Australia to give every buyer of a newly-built home $50,000.
Under the $2.5 billion proposal, 50,000 new homes will be built and more than 200,000 jobs created.
The proposed ‘new home boost’ initiative would be limited to the first 50,000 purchases and run between July 2020 and June 2021.
WHAT IS THE ‘NEW HOME BOOST’ PROPOSAL?
– $50,000 grant to all purchasers of newly constructed dwellings only, not existing housing
– Potential to stimulate the construction of 50,000 new dwellings, supporting 200,000+ jobs
– Grant scheme limited to the first 50,000 purchasers, including lessees of new retirement living units, with these to be geographically spread
– Approximately $2.5billion of Federal funding required to stimulate
– No pricing cap – the aim is to bring forward all possible market demand and stimulate the greatest economic response
– Scheme would require commencement on site between 1 July 2020 and 30 June 2021 only
Property Council of Australia
The PCA also wants stamp duty scrapped and foreigners welcomed back to Australia to buy more properties.
Chief executive Ken Morrison said ‘big and bold thinking’ was needed to restart the economy after the pandemic.
‘As Australia’s biggest employer which contributes over 13 per cent of GDP, the property industry can be a powerhouse behind economic recovery and growth with the right policy settings and market incentives from the federal, state and territory governments,’ he said.
The PCA also proposed a ‘Welcome to Australia’ program aimed at promoting Australia as a ‘safe and healthy destination’ for skilled workers.
The government already has a scheme in place to guarantee first homebuyer deposits, allowing them to get a mortgage with just a five per cent down payment.
The program was a key part of Prime Minister Scott Morrison’s election campaign and was already maxed out in the first few months of this year.