On the first week of June 2020, the Commonwealth Government of Australia released the subsidy called the HomeBuilder program. This scheme is reportedly among the economic responses of the national government to the ongoing coronavirus or COVID-19 crisis.
The Australian Government designed the HomeBuilder program, mindful of the building industry profoundly affected by the pandemic. Moreover, as a $688-million investment, the package aims to help families and workers alike.
Repercussions of the COVID-19 Crisis to Australian Property Building Sector
The Australian Bureau of Statistics (ABS) released figures on the first week of June. The numbers highlighted the problems which the building industry is currently facing because of the coronavirus crisis.
The statistics showed that, in April 2020, building approvals nosedived by 1.8 per cent. This number comes following a 2.6-per cent drop in March. Furthermore, councils greenlighted 174,719 homes over the past year for construction. These figures demonstrated an over-22-per cent fall on the average of the past decade.
Commercial building approvals plummeted by nearly 12 per cent as well, as per the ABS figures. Also in April, additions and alterations made a 13.2-per cent tumble, which demonstrated the largest nosedive in three years. Overall, these numbers released by the ABS indicated that the coronavirus pandemic had left the country’s property building industry ailing.
New Government Scheme as Social and Economic Solution to COVID-19
On the first week of June 2020, the Government of Australia declared their latest effort called the HomeBuilder program. This $688-million project serves as the social and economic response of the national government to the ongoing COVID-19 crisis.
The HomeBuilder program has two main objectives, which are to:
A. Build 30,000 houses by the culmination of 2020; and
B. Finance home renovation projects.
With the achievement of these targets, the national government seeks to turbocharge the flagging construction sector, which has hit the wall due to the coronavirus-induced recession. The HomeBuilder program will attract investment in the property-building industry as well. Under the new government aid, qualified owner-occupiers and first home buyers will receive one-off cash payments starting June 4 to December 31, 2020.
Weeks before the implementation of the new government program, industry bodies had been lobbying for the government to help Australia’s tradesmen and home builders. Thus, the government designed the HomeBuilder program to spark a tradie or tradesmen-led recovery.
It will complement several government programs such as the First Home Super Saver Scheme and the First Home Loan Deposit Scheme of the Commonwealth administration. Plus, the new package will complement other grant schemes, existing territory and state first homeowner grant programs, and stamp duty concessions.
How the New HomeBuilder Scheme Will Benefit Australian Families
As a $25,000-worth of a cash grant, the HomeBuilder program will aid Australian families tremendously. It is a financial package that allows eligible owner-occupiers and first home buyers to build a new house. Also, the program enables families to renovate their existing house substantially.
According to Scott John Morrison, the investment is for assisting families in bringing their dream home to reality. The Prime Minister of Australia cited that the additional $25,000 that the government is giving away together with record-low interest rates means that it is the right time for families to start their home building or home renovation plan.
Morrison pointed out that the HomeBuilder program is a targeted taxpayer subsidy for a limited time. He said the system utilises structures to make sure that families get to benefit from the funding. The Australian leader described these social groups as those requiring a little additional help to make essential investments themselves. Aside from the families, the new government program also helps “tradies” or tradesmen such as electricians, builders, painters, and so forth across Australia.
Economic Benefits That the New Government Program Delivers to Society
According to the Australian Prime Minister, the HomeBuilder program will help support workers all over the country. Morrison referred to these more than one million tradesmen as the plumbers, builders, electricians, and painters.
Indeed, the government’s latest subsidy will assist the residential construction market through the encouragement of new home building and renovations. The government expects its new program to support 140,000 direct construction jobs. Moreover, it anticipates helping a further one million labourers in the residential building industry that risk vanishing once projects already in the pipeline conclude.
Master Builders Australia is a group that advances the interests, contributions, and perspectives of its members and the $200-billion construction and building sector of Australia. The organisation’s chief executive officer, Denita Wawn, expressed her support for the HomeBuilder program.
She said that the government’s new investment is a needed measure towards kick-starting the Australian economy and revitalising the struggling construction sector. Wawn pointed out that the package will be a lifeline for an industry facing dismal uncertainty in the upcoming months.
She relayed that the HomeBuilder program translates to new residential properties and small enterprises. Also, Wawn remarked that the new scheme safeguards people’s jobs. The Master Builders Australia head affirmed that the latest program would help thousands of tradespeople, pubs, ute dealerships, and cafes, as well as thousands of building supply ventures.
Eligibility Requirements of the Government’s New Program
The Australian Government had laid out the qualifications necessary to be able to take part in the HomeBuilder program. The persons eligible for the one-off payments are strictly owner-occupiers planning to build a new house or perform substantial renovations on their existing home. Moreover, these people should be:
1. Couples who are earning less than $200,000 per year; and
2. Individuals earning up to $125,000 per year.
Furthermore, the government indicated that the grants are for new homes worth up to $750,000, including the land, and renovations worth between $150,000 and $750,000. The pre-renovation value of the house should be below $1.5 million as well.
According to the Morrison government, the HomeBuilder program features other requirements. They are that:
1. Within three months of the building contract date, construction must begin. The period should be between June and December 2020 to avoid a blowout in house prices;
2. Builders are the ones who will perform the home-building or home renovation activities, and not the owners.
Otherwise, the latter will not get the payment if they will renovate or build their homes on their own;
3. The government scheme disqualifies owner-builders or those intending to renovate an existing residential building, or erect a new one as an investment property; and
4. Outdoor fixtures are ineligible for the government subsidy. These additions to the property are unconnected to the primary location of residence. They include garages, swimming pools, tennis courts, sheds, and outdoor spas and saunas.
Australian people who are interested in applying for the government’s HomeBuilder program can do so in due course. The official website of The Treasury of the Australian Government indicates that the relevant Territory or State Government where a person resides or plan to move to should sign the National Partnership Agreement with the Commonwealth Government.
Once this event takes place, then the applicant will be able to apply for the grant. The relevant State or Territory revenue bureau also has the task to make details available regarding how and when consumers will be able to apply for the government’s subsidy.
The new HomeBuilder program of the Australian Government is, indeed, an important measure that gives both social and economic benefits. The incentive will aid hundreds of thousands of labourers who got adversely impacted by the COVID-19 crisis.
Also, existing homeowners or new ones will get to build or renovate their residential properties. The HomeBuilder program will undoubtedly serve as a robust bridge for Australia’s economic recovery from the coronavirus pandemic.