- Treasury has estimated that the federal government’s HomeBuilder scheme will create 9,600 jobs in the latest public-facing figures.
- Housing industry groups have disputed the new numbers, however, claiming they “grossly underestimate” the true impact of the $680 million program.
- Others are calling for it to be expanded, either for a longer duration or to include public housing investment.
- Visit Business Insider Australia’s homepage for more stories.
Early signs indicate Morrison government’s HomeBuilder scheme runs the risk of overpromising and underdelivering.
It was claimed the $680 million scheme, aimed at incentivising a wave of home building and renovating, would support “hundreds of thousands of jobs” when it was unveiled back in June.
Three months later, Treasury analysis suggests that number may be grossly over-exaggerated.
“The scheme is expected to generate an additional $1.6 billion in residential investment in 2020-21 on top of the investment that would otherwise have occurred,” officials told the Senate Committee on COVID-19 in a response to questions taken on notice.
“On average, every million dollars of residential construction activity supports employment for around six jobs in construction and related industries.”
In other words, Treasury says just 9,600 new jobs will be created as a result of the scheme, a far cry from the numbers being touted by the Coalition.
“The HomeBuilder program, we felt, was so important – to protect hundreds of thousands of jobs,” Minister for Housing and Assistant Treasurer Michael Sukkar told the ABC.
It’s a line the government has often repeated.
“HomeBuilder will help to support the 140,000 direct jobs and another 1,000,000 related jobs in the residential construction sector,” Prime Minister Scott Morrison said, unveiling the program.
But not everyone accepts Treasury’s analysis, with the Housing Industry Association (HIA) saying it “grossly underestimates” the number of jobs that will benefit.
“The $680m HomeBuilder program provides $25,000 support for new homes and renovations that meet the eligibility criteria – that is, 27,520 individual home building projects,” HIA managing director Graham Wolfe said in a statement issued to Business Insider Australia.
“With a workforce of around 4 full-time workers per project, the program will support over 110,000 workers, not including the workforce engaged in manufacturing, retailing and supply the products, materials, fixtures and fittings that go into building a new home.”
However, while Treasury certainly accepts indirect support will flow through the sector as a result of the scheme, the figures appear to point to a far smaller impact.
Less than 250 applications were lodged in the first few weeks of opening, with none approved.
HomeBuilder is ‘too small’ as construction goes ‘off a cliff’
Industry bodies still support the scheme and are calling for it to be expanded further still.
The Master Builders Association say it is working to stimulate demand, pointing to a 9% jump in lending in July, but says it should also incorporate the commercial sector.
“The outlook for the industry and the economy is extremely grim and HomeBuilder should be extended for 12 months in the Federal Budget to help maintain a pipeline of work and be a lifeline for builders and tradies,” CEO Denita Wan said.
“HomeBuilder Mark II, will require an investment of $1.3 billion, return a boost to GDP of up to $4.5 billion, create more than 4,500 additional new jobs and result in the construction of more than 6,000 new homes in addition to those created in HomeBuilder Mark I.”
Property experts, however, say any pickup will simply bring forward projects that were going to happen anyway.
“While potential homeowners are likely to be keen to take advantage of the scheme, many have noted that the policy largely creates stimulus for those that were planning to build and renovate anyway,” CoreLogic head of research Eliza Owen said.
While it will help get some off the ground earlier, Owen says it’s akin to robbing Peter to pay Paul, simply creating a vacuum further down the road.
Labor MP Jason Clare claimed Treasury’s figures show stimulus measures should be expanded, as the sector goes “off a cliff”.
“This is concrete proof that the HomeBuilder Scheme is too small and more action is needed to save the jobs of tradies in the home building industry,” the Shadow Minister for Housing said, calling for the government to fund the “construction and repair of social housing”.
“We did it during the GFC and it worked. It saved the jobs of tradies, helped to stop us going into recession and put a roof over the head of people who really needed it.”
The government has not indicated it is considering any major changes ahead of its October budget.