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Issue #1919      June 15, 2020


Homebuilder scheme won’t rebuild the economy

Two weeks ago, the federal government announced the HomeBuilder Scheme, a program designed to create jobs in the construction sector, by providing homeowners $25,000 to build or renovate their homes.

The program recognises a need to keep the construction industry afloat where, according to the president of the Australian Institute of Architect Helen Lochhead, “nearly one in [ten] Australians” are employed.

However, the project has some serious caveats.

The most glaring of these is that the grant can’t be used to cheaply fix or renovate the kitchen or bathroom. Instead, in order to receive the $25,000 taxpayer-funded grant, applicants must at least spend $150,000. Asked why homeowners must spend at least $150,000 to be eligible Housing Minister Michael Sukkar said: “We want people to have skin in the game.”

Translation: “If we’re giving you money, you have to risk a lot more of yours.”

Ultimately, the scheme leaves a lot to be desired.

Firstly, according to the ABC, “Australia’s economy is in recession — possibly the worst recession in 90 years.” This is a fact even the Treasurer had to admit recently. According to the Australian Bureau of Statistics (ABS), the unemployment rate rose from 5.2 per cent in March to 6.2 per cent in April. Even worse, the underemployment rate rose from 8.8 per cent to 13.7 per cent – a whopping 4.9 pt swing. While it is evident that the GDP is declining, we will have a better idea of the extent when the ABS releases the June quarter figures in September. Thus, these figures merely reflect the beginning of our economic downturn.

Taking this into account, an obvious question lingers: Where are everyday Australians going to come up with a spare $150,000 to augment their home? Asking working-class Australians to spend that kind of money, in a period of extreme economic uncertainty, not only beckons the spirit of Darryl Kerrigan to tell Sukkar that “he’s dreaming” but is almost incredibly irresponsible. The Australian working-class needs financial security to get through what is seeming to be a once-in-a-lifetime recession, asking them to spend it on their house is placing the burden of fixing the Australian economy on the working-class yet again.

The most glaring flaw of the scheme is that it only addresses the private sector and does not account for any public housing projects. Dr Cassandra Goldie, chief executive of The Australian Council of Social Service, stated that “There is no argument that the construction sector needs a shot in the arm, but this money will not go where it is most needed [...]. It will largely benefit those on middle and higher incomes undertaking costly renovations, without any related social or environmental benefits.”

Goldie isn’t alone in her thinking. Earlier last month, the building and construction union (CFMMEU) and Master Builders Australia (MBA), called for a $10 billion social housing stimulus package “to address the country’s affordable housing crisis by building an estimated 30,000 new dwellings.” The ALP and Greens have also pressured the government with calls to address public housing.

In juxtaposition to the proposal by the CFMMEU and MBA, the government forecasts the program will cost a mere $688 million, although it is uncapped. This projection highlights how little the Morrison government intends on helping working-class Australians. Instead of listening to the experts in social services, or the construction industry, the Morrison government has decided to go it alone with a program that will fail to address the threat the construction industry is facing, and leave vulnerable Australians with inadequate services to help them.

Next article – CPA CC Statement – Homebuilder Scheme

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