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The way forward

The way forward

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There are measures the government can take to alleviate stress in our industry. These are the areas HIA has submitted to Treasury before the next Budget.

Jocelyn Martin

HIA Deputy Managing Director – Policy and Industry

HIA’s 2023-2024 pre-Budget submission was presented to the Australian Government at the end of January. With the significant challenges of the past two years in mind, the 2023-2024 Budget will be an opportunity for the Government to consider sound and sensible skilled immigration policies and focus on attracting and retaining apprentices. HIA welcomes the Government’s commitment to build one million homes over the coming five years, but consideration must be given to lifting barriers which restrict supply, add to cost, and increase red tape for this target to be achievable.

We want to see more investment in innovation and research into ways to deliver housing more efficiently and effectively. A strong building industry is a crucial driver of a growing economy but a range of recent challenges, including supply of materials, labour shortages and access to land, have hampered progress. From activity stalling at the start of the pandemic, to the biggest boom on record over the previous two years, current indications show that building activity is set to contract again during 2023 due to the rapid increase in interest rates.

We want to see more investment in innovation and research
A strong building industry is a crucial driver of a growing economy

Supply is fundamental

A focus on reducing constraints to housing supply across the housing continuum is needed. Housing supply underpins housing affordability and improving affordability will enable more households to own their own homes. Ensuring housing supply can respond to changes in demand in a timely way should be the basis for all government actions that influence the housing market.

The Australian Government’s national housing agenda appears to support the supply and delivery of all forms of housing – from social and affordable rental housing to the private housing market. This investment must be part of a long-term strategy to ensure that the prolonged undersupply of new housing is arrested.

Growing Australia

Immigration policies must focus on skills if we are to see a society that can support its own population growth. A return of overseas migration is a positive driver and will support the demand for new homes. Rigid caps and limits should not be placed on visa categories such as skilled and business migration. If the goal is to alleviate trade shortages through migration, more consultation is needed to develop
a suitable visa for the residential building industry.

The evidence that a strong immigration policy is of net benefit to Australia is both comprehensive and compelling. A return to stable population growth, with a focus on attracting skilled workers, creates economic growth. It can improve productivity and participation across the economy.

A return of overseas migration is a positive driver
By reducing tax on housing, Australians will see greater housing affordability

Improving housing affordability

By reducing taxation on housing, Australians will see greater housing affordability. The federal government must take a leadership role, working with the state and territory governments to reduce the burden of tax on housing. Research shows that the combined costs of the statutory taxes, regulatory costs and excessive charges can range from 29 to 50 per cent of the cost of a new house and land package.

HIA has reminded the Government that the existence of stamp duty, and the impact of the cascading application of other taxes and levies, inevitably increases the cost of housing. It reduces housing affordability and erodes the capacity for new home buyers to service a mortgage.

Build careers for the future

Attracting apprentices and retaining them through mentoring is key to growing a healthy industry workforce. At 8.4 per cent, the construction industry delivered the greatest growth in jobs during the Albanese Government’s first six months in office. Since the September quarter of 2021, the HIA Trades Availability index has recorded a trades shortage that is worse than all prior readings of the index, going back to 2003. Driven by this persistent shortage, the price of skilled trades rose by 10.4 per cent over the year to the September quarter 2022.

Developing the workforce capabilities of the residential building industry should therefore be
a key part of the Government’s agenda. Through the delivery of several significant mentoring programs, HIA has experienced first-hand the value mentoring can contribute to retention, and to professional and academic skills. We have asked the Government to invest significantly in mentoring programs and to consider career support in schools.

Find out more on HIA’s 2023-2024 pre-Budget submission
HIA is seeking the establishment of a national program to provide independent advice to small businesses’

Improve the regulatory climate

In our Budget submission, HIA is seeking the establishment of a national program to provide independent advice to small businesses, and in particular independent contractors, about meeting their tax and other regulatory business compliance obligations. Tailored industry education of the National Construction Code 2022 is needed, whether that be provided by the Australian Building Codes Board, the states/territories or industry bodies. We need to allow builders and trades to get on with building – not trip them up by persistent regulatory change.

Invest in innovation

Innovation plays a critical role in moving an economy forward and the sustainable development of the construction industry. Having often lagged behind in generating innovative solutions with appropriate investment, the industry has the capacity to lead the economy towards better ways of addressing liveable housing and sustainability.

A key component of industry leadership and innovation is to apply data-driven decision-making and create digital solutions to develop and improve access to industry resources. This helps to improve compliance, practitioner knowledge and the confidence within the industry toward new and innovative building products and techniques.

A commitment to researching more efficient and effective ways of delivering housing is warranted, as well as the benefits of digitising information to, for example, make codes and standards more easily accessible.

First published on 3 April 2023

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