21 May 2024
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BUDGET LEAK: Dr Jim will help make 1.2 million homes

Peter Switzer
8 May 2024

Budget leaks keep coming and yep, it’s a good news leak that says the Government will throw a lot of money at helping the homebuilding sector get more workers to help bring down the cost of constructing houses and apartments. Reportedly this makes Labor’s promise of 1.2 million homes by 2029 a better chance of happening.

The ideas look positive but the roadblocks of the three levels of government regulation that add at least 33% to the cost of a new home remain unaddressed. Hopefully, that might be a post-Budget goal!

So, what are we to hear from Dr Jim Chalmers next Tuesday about his plans to get more homes built? Try these measures:

  1. $62.4 million for 15,000 new construction-linked fee-free TAFE places.
  2. $26.4 million to deliver 5,000 places in pre-apprenticeship programs.
  3. Construction apprentices are set to receive wage subsidies that could max out at $10,000 over the period of training.
  4. Skills assessments will be fast-tracked for 1,900 British and foreign tradies.

These initiatives will be aimed at housing-related jobs including quantity surveyors, site project managers, draftspeople, landscapers, carpenters, plumbers, and bricklayers.

This latter measure is similar to what has been announced for trainee teachers, nurses, and social workers, who The Australian says “…will be paid up to $8,307 to learn on the job in schools and hospitals”.

The Australian’s Geoff Chambers revealed that this comes as the Prime Minister is poised to “…announce a $566m funding program over 10 years to drive mining exploration and find deposits of minerals and energy sources to anchor his Future Made in Australia.

Employers are supportive of a wage subsidy model that lifts apprenticeship completion rates while acknowledging the time, costs and administrative work undertaken by construction firms.

The Master Builders Association (MBA) and the Housing Industry Association (HIA) on Tuesday endorsed the government’s budget measures.

MBA chief executive Denita Wawn told The Australian that the budget measures were a “step in the right direction and make inroads across the schooling, VET and migration systems as important pipelines to grow our workforce”.

On how these measures will address sone of the big problems for builders, Ms Wawn said: “Workforce shortages remain the biggest source of cost pressure and disruption for the building and construction industry”.

And it’s hoped that the Budget measures will help keep more people in the housing industry because, as Wawn pointed out: “Despite a sizeable workforce of 1.35 million Australians, the industry has an annual exit rate of 8 per cent and we are only replacing half of those people a year.”

Undoubtedly, these Budget changes are positive ones but someone in the Federal Government has to get state and local governments onside to fast-track developments, with a lot less regulation-created costs that are inevitably passed on to the consumer. Can you imagine what a 10% reduction in the regulation costs of building would do to inflation and to the total number of homes built in this country?

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