Coronavirus: Near $1bn boost for building kicks off targeted stimulus

Scott Morrison’s $1bn building stimulus package the first of a series of targeted measures for at-risk sectors.

Scott Morrison’s building package is expected to prioritise new homes and major construction activity through financial assistance. Picture: AAP

Scott Morrison’s construction stimulus package — valued at just under $1bn — will be the first of a series of targeted measures for at-risk sectors, as the government monitors real-time economic activity to guide the nation’s COVID-19 recovery leading up to the October budget.

The building package is expected to prioritise new homes and major construction activity through financial assistance, including direct cash grants of between $20,000 and $50,000.

The Australian understands the government will unveil its arts and entertainment support package next week, and could announce the scaling back of free childcare by Friday.

Although the emergency childcare assistance measures were scheduled to expire on June 28, contingent on the program being reviewed, they are not expected to snap back to the regular subsidies immediately, in a bid to help ease the sector back to full capacity.

Federal cabinet is due to meet on Wednesday to discuss the government’s COVID-19 response, coinciding with the release of national accounts expected to show economic growth flattening or dropping into negative territory in the March quarter.

The government has begun shifting from its immediate big-spending response to the COVID-19 pandemic towards more targeted packages supporting sectors including housing, entertainment and tourism.

As Treasury finalises its review of the JobKeeper scheme this month, the government is monitoring real-time data, including point-of-sale information from banks, consumer confidence numbers, construction figures and retail spending, to assess whether aspects of the economic recovery are in the form of a V shape, indicating a faster trajectory.

On Monday, the Prime Minister said the government had laid down the “strongest possible safety net and platform to ensure Australians could be supported during the economic crisis”.

“JobKeeper, JobSeeker, the cashflow allowance, some $150bn of safety net for Australians, broad based,” Mr Morrison said.

“Now, as time goes on, there are sectors who will endure more of the pain for longer.

“And what we’ve seen, there’ll be gaps that occur in our economy, and house building, residential construction will be one of those gaps that we have to address.”

The government’s housing project, led by Housing Minister Michael Sukkar, is expected to be announced on Thursday and is mainly focused on larger projects and new homes to counter fears of a drop-off in the construction sector towards the end of the year.

The Housing Industry Association, Master Builders Australia and the Urban Development Institute of Australia have been urging the government to deliver stimulus to the industry. The MBA last month called for a $13.2bn building and construction action plan.

The government’s building stimulus measures are expected to target up to 380,000 tradespeople who have been hit by the COVID-19 economic shock.

The stimulus package is expected to extend the eligibility of the first-home buyers’ scheme to existing owners. Strict conditions are likely to be imposed on home renovation eligibility.