HomeBuilder cash splash is one we can ill afford

Illustration: Eric Lobbecke

The government’s latest taxpayer handout to help Australia pull itself out of the first recession in 29 years — the HomeBuilder package, touted to be worth $688m — is more marketing ploy than public-policy outcome.

And there is a theme developing when it comes to this government focusing on spin over substance.

Its design means the actual amount of money the cash splash soaks up is likely to be significantly less than the grand announcement on Thursday morning.

To much fanfare Scott Morrison and Josh Frydenberg declared that they were helping to save a million jobs connected to the construction industry by pumping up to $688m into home renovations. The words “up to” are important to keep in mind.

The scheme allows someone earning less than $125,000 (or couples earning under $200,000) to received $25,000 of taxpayer money on a reno of more than $150,000 in the next six months.

Here is my question: how many Australians earning less than $125,000 (before tax) are going to spend more than $150,000 (after tax) on a renovation in the middle of a recession who weren’t already going to? And with more jobs likely to be lost as JobKeeper comes to an end, how responsible really is it for the government to encourage them to do so anyway — when job insecurity has never been more real during the working lives of most of us?

The likeliest outcome is that far fewer people take up the scheme than it has been costed to cover. That would mean the government gets to have its cake and eat it: announce it is spending a lot of money to support the construction sector and middle-class Australians looking to upgrade their properties, but in 12 months tell us the budget position is better than expected because the uptake was lower than expected.

It is an exercise in marketing, not good public policymaking. We’ve seen this before with fanfare announcements, after which the actual quantum spent is far lower than that initially promised. Think bushfire recovery fund ($2bn announced, $250m spent), drought fund ($7bn announced, $2bn spent) and of course the mother of all misses, JobKeeper ($130bn announced, $70bn spent).

Each time the government wants praise for the size of the spend, then praise for the fiscal discipline of spending less.

And the failures in this week’s big announcement don’t end there. We know from survey research done that the sectors where the most jobs have been lost are those that affect women more than men, which includes casual employees ineligible for assistance under JobKeeper.

What area of employment has one of the lowest rates of female participation? You guessed it: the construction sector.

Throw in that the area most in need of spending on housing is social housing — not a core Liberal constituency, mind you — and you start to see what’s really going on here.

Constituency pandering and pork-barrelling: it’s not as blatant as with sport rorts but unedifying all the same.

With the government’s eyes firmly fixed on the marketing spin of this announcement, the terms of the scheme preclude people using the money to build everything from swimming pools to tennis courts. That’s because the Coalition doesn’t want a political backlash — to be seen to be funding ­largesse.

Unsurprisingly, organisations such as the Property Council (which Morrison used to work for, incidentally) and the Master Builders Association have come out in favour of the stimulus announcement. Their positive appraisals are part of the reason the government has acted to prop up this particular sector but not others seen as less “core” to the Coali­tion’s heartland — for example universities, which have ­announced a $16bn funding shortfall in the years ahead that will result in substantial job losses.

Until recently, higher education was touted as Australia’s second largest export industry. Now it has been ignored, not ­because there isn’t a valid public-policy reason to render assistance but because the marketing behind doing so doesn’t present any clear advantages.

For a start, the money couldn’t be announced and not actually spent as easily as will be the case when it comes to the HomeBuilder scheme.

As flawed as the policy merits of the latest taxpayer handout are, the bigger issue of the week of course was the news that Australia has slid into recession.

We only have first-quarter results, but the Treasurer acknowledged on Wednesday what we already knew: the coronavirus pandemic guarantees second quarter gross domestic product numbers will also be negative, putting Australia in its first technical recession since 1991. While Frydenberg and the Prime Minister shouldn’t have got ahead of themselves declaring Australia was “back in black” and printing mugs gloating about it before it was a fact, the recession is nobody’s fault. It is global, it is unavoidable.

From here the attention turns to how we recover. That is where the policy and reform debate will need to rise above the spin and marketing our Prime Minister is trained in.

It will take far more pointy-headed intellects within the government to manage that challenge successfully.

John Howard and Peter Costello were both men of substance, as were Bob Hawke and Paul Keating. Morrison’s career history might be in marketing, but he has proven himself politically savvy, which matches up neatly with Hawke and Howard.

The two key figures within this government who will need to step up to make up for what Morrison lacks in policy substance are Frydenberg and Industrial Relations Minister Christian Porter.

Both men have an abiding interest and training in the finer art of policymaking, with an ideological lens that rises above the base political pragmatism that Morrison has deployed (albeit successfully).

Frydenberg and Porter not only provide the intellectual ballast needed within the government, they are the leaders-in-waiting if or when Morrison stumbles or walks away.

They will need to hold his hand through the necessary reforming era Australia must now embrace, for us to remain the lucky country.

It won’t be easy, especially with the calibre of the parish pump and reactionary MPs littered across the government’s backbench.

Peter van Onselen is the political editor at the Ten Network and a professor of politics and public policy at the University of Western Australia and Griffith University.