With the health risks from COVID-19 substantially mitigated in recent weeks through the collaborative efforts of federal and state governments, and the wider community, it is great news that governments have now turned their attention to protecting jobs and stimulating economic activity.
HIA’s input to government has been in the context of proposing short-term actions to protect and grow jobs followed by medium- to long-term actions and reforms in order to grow our industry further, and make it more efficient.
The HomeBuilder program announced by the federal government in early June was important for the residential building industry in many ways. Most importantly, it provided a significant financial incentive for consumers to commit to building projects that will help to protect and generate jobs and activity.
As HomeBuilder was the first of the government’s sectoral support programs, it demonstrated that the federal and state governments acknowledged the crunch the industry would be facing later in the year, and the important role that the industry could play in underpinning the economic recovery from COVID-19. While HomeBuilder did not cover all corners of the industry, it has provided a framework within which HIA can continue to argue for expansion of its scope, duration and eligibility.
HIA worked behind the scenes with all levels of government to try to avoid the hiatus that unfortunately arose when talk of a potential stimulus hit the media. This highlighted the balance that needs to be struck in promoting a cause between raising its profile and encouraging counter-productive responses from consumers.
Now that the ‘ice has been broken’ with HomeBuilder, HIA believes the risk of publicly promoting further measures has been reduced.
In the context of medium-term industry actions, HIA’s Home Building Recovery Plan submitted to the federal government in April addressed a number of solutions. This included a capped GST rebate that could be credited to home buyers’ loan accounts after completion of construction, immediately addressing housing affordability issues, and incentivising incremental buyers to enter the market and further stimulate jobs and economic activity.
As always the availability of finance, both for consumers and businesses, is an essential component of a durable recovery. HIA will be urging the federal government to expand its successful First Home Loan Deposit Scheme and to introduce a federal program along the lines of Western Australia’s KeyStart loan program, which has successfully provided major support for home buyers in the west for decades.
However, the private banks – the major suppliers of finance – will have a crucial role to play. The government will need to be flexible in its regulation of consumer loans in particular. Stamp duty concessions will also help to support the industry for the longer term.
The federal government is suggesting that in 2021 alone an 85 per cent drop in migration is likely. This will have a substantial impact on the demand for new homes. Restoring immigration levels once the COVID-19 restrictions have eased won’t happen easily but solutions based upon testing and isolation regimes upon arrival are workable. Removing the state government stamp duty surcharges on foreign buyers, and relaxing visa restrictions for students and foreign workers will all help.
With the industry under pressure for at least the next year it is also a good time for governments to be investing in community and social housing, another area which HIA will be actively promoting. Governments will get great value for money in the current environment. Community housing in particular has the capacity to drive the government dollar further by leveraging government subsidies with private sector loans, thereby delivering additional affordable housing.
Additionally, HIA will continue to advocate for better access to JobKeeper for businesses in the industry. The JobKeeper and the Supporting Apprentices and Trainees programs have demonstrated how effective a wages subsidy can be when it is targeted at the newer apprentices who are more vulnerable to leaving their training. The recently announced review of national training arrangements should provide a vehicle for more consistent and effective funding of apprenticeships in the future, as well as potentially demonstrating the new-found cooperation between federal and state governments through the new national cabinet process.
HIA will be advocating for this extensive package of measures for the foreseeable future and appreciates the support that members have given to our efforts to date – support that we will need as the economy begins to emerge from the COVID-19 crisis.