A $13.2 billion building and construction stimulus action will stimulate over $30 billion in new economic activity and create more than 100,000 new jobs across the economy according to new economic EY modelling commissioned by Master Builders Australia.
Denita Wawn, CEO of Master Builders said, We are seeking stimulus not subsidies from government, we want National Cabinet to urgently implement this independently modelled stimulus package and establish a special task force to fast track commencement of construction activity.”
EY modelling shows that a $13.2 billion investment by governments in a Master Builders proposed stimulus package will mean:
❖ $30.9 billion in GDP from the $13.2 billion investment
❖ Creation of 105,500 jobs in construction and across the economy
❖ $17.6 billion in expanded construction activity (new dwelling starts, renovations and commercial construction activity)
“Building and construction is shaping up to be one of the industries worst hit in the long term by the COVID-19 economic crisis. We know from previous downturns that it takes four times longer for our industry to recover than the rest of the economy,” Denita Wawn said.
“This economic crisis is not the result of a market failure; it is the result of the lockdown imposed by governments in response to the public health emergency of COVID-19. We are asking our political leaders to show the same courage and vision in supporting our industry as they showed in responding to the health emergency,” she said.
“Work for builders and tradies in 2020/21 is fast evaporating and the indications are that 2021/22 will not be much better. There is no time to spare in meeting this threat to the viability of nearly 400,000 building business and the jobs of 1.2 million people employed in our industry,” Denita Wawn said.
“We also want to see a dedicated building and construction industry taskforce established to oversee the implementation of the stimulus action plan. For stimulus to occur building activity needs to commence. Builders and tradies cannot sustain their businesses and jobs on promises. We have seen that governments can fast track construction activity in response to natural disasters and COVID-19 is shaping up as an economic disaster,” Denita Wawn said.
EY was commissioned to model a stimulus package comprised of the following programs:
A $40,000 uncapped the new home building grant.
❖ $17 billion in additional economic activity resulting from $5.2 billion investment by government.
❖ The creation of 58,311 jobs right across the economy almost replenishing the 77,580 jobs lost in construction since the start of the Covid-19.
❖ Delivering 14,000 extra new homes.
❖ Resilience renovation program (funding for renovations to make homes resilient to natural disasters or to make homes more accessible).
❖ $7 billion in economic activity for $4 billion investment by government.
❖ Creating 24,036 jobs.
For commercial programs (programs including funding for cladding/asbestos rectification, a10% drop in developer charges, 5% increase in government spending in health, defence and education)
❖ $6.8 billion in economic activity for $4 billion investment by government. This excludes wider economic benefits in relation to health, safety and building quality.
❖ Creating 23,118 jobs.