Master Builders Australia (MBA) has called for billions in stimulus measures to support the construction industry through the demand shock forecast to hit in 2020/2021.
The organisation is calling for a new stimulus measure called CommunityBuilder, which aims to employ the HomeBuilder model to kickstart work for thousands of small and medium commercial construction businesses.
MBA modelling suggests that an investment of $3.8 billion will deliver a boost of $6.8 billion to GDP and create 13,000 jobs.
Master Builders Australia CEO Denita Wawn said a 12-month extension of HomeBuilder will boost GDP by between nearly $4 billion and $4.5 billion, create more than 4,500 new jobs and result in up to 6200 new dwelling starts.
“Our call for these measures is backed up by our latest forecasts which show the sheer scale of the challenge our industry faces,” she said.
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“Despite the positive impact of the highly effective HomeBuilder grants, we have downgraded our forecast for the housing sector by 25 per cent for 2020/21 so that we are now predicting a 27 per cent fall in homebuilding activity compared to 2019/20,” Wawn said.
“Commercial construction activity is forecast to slump by 17 per cent. You will not see many cranes in the sky, and it will mean that thousands of businesses are at risk of simply exiting the industry along with the thousands of jobs that they provide,” she said.
Wawn said residential and commercial construction respectively have the second and third largest multiplier effect in the economy which means a potentially disastrous day at the office for thousands of other businesses in the building supply chain and the broader economy.
“Our industry is facing a bloodbath, there is simply no other way to describe it. Private sector investment is evaporating, and the Government must step in to save businesses and jobs,” she said.
The MBA is also calling for CommunityBuilder to involve the Federal Government providing grants to not-for-profit and local grassroots community organisations to help fund the construction of new facilities or the substantial renovation of existing ones.
“The Government could set the parameters at funding 25 per cent of projects costing up to $5 million and like HomeBuilder the beneficiary of the grants would need to put up the rest of the money and also receive additional assistance from state and local government,” Wawn said.
“HomeBuilder has resulted in home builders having the best months in terms of sales in a decade and the positive impact on building approvals will be showing up strongly in months to come. CommunityBuilder would have the same effect and see new or enhanced community centres, libraries, school buildings and sporting facilities.
“Grant recipients having skin in the game would mean they would be highly motivated to ensure that builders provided value for money and a three-year window would ensure there is sufficient competition to ensure costs don’t blow out.”