HomeBuilder: As development forecasts slump, government announces red tape cuts

Tradies, teachers and property agents will be able to work across the country – bucking a policy of state-bound licencing – in a plan designed to cut red tape and boost work opportunities as Australia’s job numbers contract. 

There’s currently 800 different licences in trades including carpenters, joiners, bricklayers, builders, electricians and plumbers that limit them to work in the state or territory they were obtained. 

But the mutual recognition regime is complex, costly and burdensome on businesses that conduct business across state lines, Treasurer Josh Frydenbgerg said, and is in need of reform.

“A uniform scheme will make it easier and less expensive for businesses, professionals and workers to move or operate within jurisdictions and across Australia,” he said, “thereby creating jobs, increasing output, competition and innovation, and resulting in lower prices for consumers and businesses.”

Commonwealth, state and territory treasurers agree the licences that tradies, teachers and property agents obtained should be recognised across other parts of the nation, and plan to pass legislation to see the reforms take effect on 1 January, 2021.

“It is vital to ensuring Australians, including displaced workers, can take up new job opportunities wherever they arise as the economy recovers and restrictions on movement are eased from COVID-19,” Mr Frydenberg said.

Keeping the construction industry chugging along

The announcement, made as states and territories restrict border access to prevent the spread of COVID-19 in Australia, is another measure spearheaded by the Federal Government to help stimulate the construction industry at a time when work is drying up and unemployment is on the rise.

The government’s HomeBuilder plan aims to stimulate the construction industry by offering eligible people grants to renovate or build homes.

The $680 million initiative offers grants of $25,000 to owner-occupiers spending from $150,000 to $750,000 renovating their home, or people building a new home on land worth no more than $750,000.

• Find out if you’re eligible for HomeBuilder by viewing the criteria here.

A fraction of people spent $150,000 or more renovating their home last year, according to Houzz and Home. Their survey of 4500 people found ten per cent met the spending threshold in order to be eligible for HomeBuilder. 

Development forecast slashed by more than 25 per cent

The national lobby group representing the $220 billion building and construction industry is forecasting the number of homes being built in the next year to drop by more than a quarter, and is calling on the government to spend billions more on stimulus packages. 

“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 homebuilding activity compared to 2019/20,” Denita Wawn said, chief executive of Master Builders Australia.

“Private sector investment is evaporating, and the Government must step in to save businesses and jobs.

“... Our industry is facing a bloodbath, there is simply no other way to describe it.”

The lobby group is calling on the Federal Government to extend the HomeBuilder grant from six to 18 months, pushing the cost into the billions – but they claim the investment would yield a return.

“A 12 month extension of HomeBuilder will boost GDP by between nearly $4 billion and $4.5 billion, create more than 4,500 new jobs and result in up to 6,200 new dwelling starts,” Ms Wawn said.

What about a ‘CommunityBuilder’ package?: Lobby group

They are also calling for a supplementary stimulus package – coined CommunityBuilder – that would offer grants to not-for-profit and local grassroots community organisations to help fund the construction of new facilities or renovations that’ll overhaul existing ones.

“CommunityBuilder … 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,” she said.

“Our modelling suggests that an investment of $3.8 billion will deliver a boost of $6.8 billion to gross domestic product and create 13,000 new jobs.”

The group is hoping the measure will be funded in the Federal Budget to be announced in October. 

Fewer than 250 HomeBuilder applications – so far

HomeBuilder is being heralded as a lifeline for the construction industry by developers and lobby groups, but it’s difficult to measure the impact it’s had two months after it was revealed.

A Senate COVID-19 select committee heard testimony on Friday that revealed 247 HomeBuilder applications had been formally lodged, according to The Guardian – of which 157 were from South Australia and 90 were from Tasmania.

“They’re the applications that have been received to date,” Vicki Wilkinson, the head of Treasury’s social policy division, told the committee. “To date no payments have been made.”

The majority of states and territories began receiving applications in July, while New South Wales began accepting them last week.

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