“Putting building and construction at the centre of the Budget recovery makes perfect sense. With every $1 spent generating $3, construction is recovery’s accelerator,” Denita Wawn, CEO, Master Builders Australia said.
“What we know about the Budget so far shows that the Government is learning from our former darkest days when the boldest reforms and most coordinated rapid responses were our lifeline,” she said.
“How the Government tackles the challenges of confidence and time will be key to the Budget’s overall success,” Denita Wawn said.
“Our members depend mostly on private sector demand and we know from previous crises that two key underpinning factors, business investment and employment, take around 4 times longer to recovery than the broader economy,” she said.
“When it comes to infrastructure, they must feel the need for speed. Immediate construction must be the focus because without it there is no stimulus, there are no jobs,” Denita Wawn said.
“It can’t just be about ministers and mayors with shiny shovels cutting ribbons or infrastructure technocrats staging a reenactment of TV’s Utopia,” she said.
“The scope of the infrastructure spend should also extend beyond roads. Building new hospitals, university campuses, social housing, research and defence facilities must also be part of building us out of recession,” Denita Wawn said.
“The Federal Budget, as the title indicates, is the budget for the Federation. State and territory jurisdictions must play their role. Harnessing the highly effective HomeBuilder model to provide state governments with the opportunity to fund more projects in shortened time frame would see projects rolling out faster,” Denita Wawn said.
“Dwelling investment also falls hard during economic down turns and this one is the most severe for nearly 100 years. In the 1991 recession housing investment took twice as long to recover as the broader economy,” she said.
“The Government’s HomeBuilder scheme is proving to be one the most effective interventions in decades. Its First Home Loan Deposit Scheme helps tackle the crux of the issue for first home buyers which is the deposit gap and is supporting more people to access the single most effective method of building financial security. But more is needed,” Denita Wawn said.
“HomeBuilder needs to be extended by 12 months from 31 December to support builders and tradies who are staring down the barrel of oblivion in 2021,” she said.
“The Government must also deliver in the Budget with measures that recognise that confidence is king when it comes to generating aggregate demand,” Denita Wawn said.
“Since it is already looking back to the future for its Budget response, the Government should be looking at including a business investment allowance or accelerated depreciation scheme has generated an increase in private capital investment on every previous occasion in history,” she said.
“The economy is simply too big for government spending on its own to fill the gap left the collapse in private demand but building businesses won’t be able to take up incentives to invest in apprentices or plant and equipment without a pipeline work,” Denita Wawn said.
“It means that Master Builders will be looking for a Best On Ground performance from the Government with this Budget and its implementation,” Denita Wawn said.