According to reports, the Morrison government is set to announce a new stimulus package this week, designed to drive housing construction by incentivising the purchase of new dwellings through the prevision of home-buying grants.
Prime Minister Scott Morrison confirmed that a prospective stimulus package would focus on supporting large infrastructure projects and new housing construction.
“We’ve been looking closely at the residential building sector,” Prime Minister Morrison said.
“The Treasurer has been doing some great work with the states as well who are interested in working on those issues.”
He added: “[We] are looking at a bit of a drop-off in the current home building that’s going on and that’s not good for tradies and it’s not good for jobs.
“The other thing about those sorts of projects is that you’re going to get more of your local tradies involved in these things,” he said
JobKeeper savings could fund stimulus
The property industry has been calling for fiscal support from the government amid expectations of a prolonged downturn in the housing market.
Managing director of KDL Property Group Kent Leicester said the government could fund a stimulus package with the $60 billion in overstated costs associated with the JobKeeper program.
Last month, it was revealed that after reviewing the forms of approximately 910,055 businesses applying for the federal government’s JobKeeper subsidy, the Treasury and the Australian Taxation Office have identified a “reporting error”, which has grossly overstated uptake of the program.
The government initially reported that approximately 6.5 million Australians would be granted income support from the program, totalling approximately $130 billion.
However, the review has found that just 3.5 million Australians would be covered under the JobKeeper program, totalling approximately $70 billion.
“The construction industry produces almost 10 per cent of Australia’s gross domestic product and is the third-largest employing industry behind healthcare and retail,” Mr Leicester said.
“There is an opportunity here to support a sector which generates more than a million jobs, many of them very small businesses or sole traders.”
He added: “A plethora of tradespeople are supported by residential housing projects, including carpenters, builders, landscapers, plumbers and electricians, and this extends to all the suppliers of building products and their staff.
“These workers need to be protected from a potential industry downturn.”
Mr Leicester backed Master Builders Australia’s proposal to create a new home grant of $40,000.
“We saw a lot of new home stimulus coming out of the global financial crisis that had a positive impact on the constructor sector and a similar response now would be welcome,” he said.
Mr Leicester also urged the government to address the expected drop-off in overseas migration by focusing on measures to attract skilled migrants.
“Australia to this point has not been hit as hard as other countries such as the United States and Britain by the COVID-19 pandemic, and to many people overseas it might seem like one of the most desirable places to live in the world,” he concluded.
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Charbel Kadib is the news editor on the mortgages titles at Momentum Media.
Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.