Support for industry

The federal government is right to back housing in its post-pandemic recovery plans.

Author

Simon Norris – HIA National President

I am extremely confident that the residential building industry will be able to deliver on the programs that the federal and some state governments have put in place to drive the economic recovery out of the COVID-19 recession. Importantly, the programs should see the industry’s activity levels continue through to at least the end of 2021. 

While the pandemic is not something that any government had planned for, the federal government’s response has been timely and bold. The early introduction of JobKeeper to stop instant slashing of employment as we went into lockdown in March gave a powerful indication of the government’s commitment while providing a degree of confidence about the future. The follow-up with HomeBuilder in June provided a crucial stimulus for the second half of the year and into 2021. In the absence of this stimulus the impact on the industry would have been devastating.

To continue driving confidence and home buyer incentive, the adding of a new tranche of 10,000 First Home Loan Deposit Scheme places in the October Federal Budget for people building their first home will further underpin activity in 2021. The budget’s allocation of a further $1 billion in loans for the community housing sector will also add around 3000 to our stock of affordable housing.

Throughout this period the support that has been provided to the employers of apprentices has been crucial in initially keeping apprentices in work and, more recently, in encouraging employers to take on new apprentices. The wage subsidies provided have also helped to develop the skills base of the industry for the future and give young people a more certain career path.

Home building has played an important role in almost all post-war economic recoveries, so governments are right to help in unleashing the industry’s potential to push the recovery along this time too. Unlike big infrastructure projects, the residential industry can respond quickly to incentives with rapid increases in jobs and activity. The benefits of a lift in home building speedily ripple through to suppliers, manufacturers and retailers of building products, and every other product that makes a house a home.

With the exception of JobKeeper, all of these federal government initiatives had been promoted by HIA, along with its COVID-safe guidelines for building sites. Our aim was, and continues to be, keeping the industry operating at the highest level possible. While this has been challenging, especially in Victoria, the residential building industry has largely remained open during 2020. Some of the reason being that building is in part an outdoor activity, but also because of HIA’s intimate understanding of the needs of members and the industry’s processes.

One of the constraints that has emerged in response to the stimulus measures has been pressure on land availability. HIA will be ramping up its efforts to urge state and local governments to speed up the land development approval processes to enable the industry and its customers to capitalise to the fullest extent possible on the time-limited government incentives. It would be a tragedy if trading conditions in the industry deteriorate throughout 2021 as a result of unresponsive state and local planning approval processes.

State and local government support for the industry has been patchy: very good in places such as Western Australia and less so elsewhere. HIA is keeping the pressure on; it can’t be left just to the federal government to respond to the recession.

With the 2020 Federal Budget forecasting a dramatic slowdown in population growth for the next few years, this year’s support measures have bought the industry some time to adjust to what will be a lower level of demand for new homes compared with the past 10 years. 

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