2024 budget: Construction focus to save ‘new homes’ vow

Construction workers are set to receive wage subsidies and skills assessments fast-tracked for foreign tradies as Labor uses the budget to shield its 1.2m new homes pledge.

The budget will shield Labor’s 1.2m new homes pledge, with construction workers set to receive wage subsidies and skills assessments fast-tracked for foreign tradies.

Jim Chalmers will make housing a centrepiece of next week’s budget to shield Labor’s 1.2 million new homes by 2029 pledge, with construction apprentices set to receive wage subsidies and skills assessments fast-tracked for 1900 British and foreign tradies.

The budget includes housing packages designed to address industry concerns about labour shortages fuelled by apprentices exiting the sector early and red tape blocking access to inter­national tradies with comparable qualifications.

The Australian understands targeted incentives for construction apprentices will not replicate the Morrison government’s pandemic model that saw 50 per cent of wage subsidies paid to employers rather than workers.

Skills and Training Minister Brendan O’Connor previously told The Australian the Coalition scheme was “unsustainable” and did not deliver value for money because it failed to reverse declining completion rates.

In February, Mr O’Connor said “we need to do better in the way we support apprentices and the way we support employers who take on an apprentice”, highlighting that apprentice wages were often lower than the minimum wage.

Ahead of the budget, the government has announced trainee teachers, nurses and social workers will be paid up to $8307 to learn on the job in schools and hospitals. The New Energy Apprenticeships Program, giving apprentices up to $10,000 over the duration of their training, will also be expanded.

With the government preparing to extend its energy bill relief package and the Treasurer considering further Commonwealth Rent Assistance and JobSeeker increases, Anthony Albanese will deliver a speech in Perth on Wednesday declaring the budget will help Australians with cost-of-­living pressures while not “adding to inflation”. The Prime Minister will back the state’s resources industry and announce a $566m funding program over 10 years to drive mining exploration and find deposits of minerals and energy sources to anchor his “Future Made in Australia”.

New budget housing measures announced by Housing Minister Julie Collins and Mr O’Connor on Wednesday will include $62.4m for 15,000 new construction-linked fee-free TAFE places and $26.4m to deliver 5000 places in pre-apprenticeship programs.

The programs will focus on housing-related jobs including quantity surveyors, site project managers, draftspeople, landscapers, carpenters, plumbers and bricklayers.

The budget includes $1.8m to streamline skills assessments for 1900 potential migrants from countries – headlined by Great Britain and Canada – who have comparable qualifications and who want to work on Australian construction sites. Processing will also be prioritised for 2600 Trades Recognition Australia skills ­assessments in targeted occu­pations.

Former Fair Work Commission president Iain Ross and University of Canberra chancellor Lisa Paul are currently leading the government’s review of the Australian Apprenticeships Incentive System.

Employers are supportive of a wage subsidy model that lifts apprenticeship completion rates while acknowledging the time, costs and administrative work undertaken by construction firms.

In its submission to the apprenticeships incentive review, Master Builders Australia said nursing and teaching host employers are “tasked with giving on the job training but they do not shoulder the entire financial and administrative burden of doing so … employers of apprentices in building and construction need better support, subsidies, assistance and training”.

The MBA and the Housing Industry Association on Tuesday endorsed the government’s budget measures.

Mr O’Connor said the budget was backing people gaining a trade “whilst accessing government incentives” and reducing cost-of-living pressures through more affordable housing.

Ms Collins said the government “knows that building more homes is the best way to address Australia’s housing challenges, which is why we have an ambitious national target to build 1.2 million homes”.

The new pre-apprenticeship places will support more people into a construction apprenticeship and provide students with direct industry experience before choosing whether to commence.

MBA chief executive Denita Wawn said the budget measures were a “step in the right direction and make inroads across the schooling, VET and migration systems as important pipelines to grow our workforce”.

“Workforce shortages remain the biggest source of cost pressure and disruption for the building and construction industry,” she said.

“Despite a sizeable workforce of 1.35 million Australians, the industry has an annual exit rate of 8 per cent and we are only replacing half of those people a year.”

In WA, Mr Albanese will say advanced economies around the world are engaged in a “new competition for the next generation of jobs, investment and prosperity”.

He will say the government, which has made a series of multi-billion-dollar direct investments in critical minerals and rare earths, solar panel manufacturing and quantum technology, is not “taking sides or picking winners”.

“Central to the approach is the capacity of government to be a catalyst for private capital. To help businesses grow and thrive by providing tax credits, investor incentives and cutting red tape to accelerate projects and boost productivity … as well as direct investment to support pre-commercial activity and a combination of loans and subsidies to attract private capital,” Mr Albanese will say.

He is expected to make a series of budget announcements in WA, where Labor is desperate to hold on to seats it claimed from the ­Coalition at the last election.

He will say WA miners, universities and businesses have a “central and vital role to play”.

“Western Australian gas and iron ore helps build our nation’s wealth – and power Asia’s growth,” the Prime Minister will say.

“Gas is playing an important role in firming and energy security, as our economy transitions.

“And we know that making more solar panels, batteries and clean energy technology … means exploring and extracting more lithium, cobalt, nickel, copper, critical minerals and rare earths.”

The government’s pre-budget announcements come as an SEC Newgate Mood of the Nation poll of 1208 voters revealed a darkening national mood ahead of the budget.

The survey, conducted between April 23-26, showed the Coalition was now neck-and-neck with Labor in relation to which party is best at managing the cost-of-living crisis.

Amid pressure on the government to explain how it will rein-in National Disability Insurance Scheme costs, 51 per cent of voters feel the NDIS isn’t targeted well enough and that too many people are getting benefits they don’t deserve”. Only 24 per cent believe the NDIS is targeted at the right people.

Nearly two-thirds of voters feel Australia is heading in the wrong direction and 45 per cent think the economy will deteriorate over the next 12-months. The top budget priorities for voters are health, cost-of-living relief, housing supply and affordability, reducing crime, aged care, tax cuts, reining-in debt and education. The poll lists NDIS funding as the last of 16 top budget priorities.

SEC Newgate partner David Stolper said the research shows “a distinct shift in the national mood towards greater pessimism”.

“(This is) possibly triggered by the realisation that interest rate cuts are now further away than expected, the corrosive effect of ongoing rising prices on household budgets, and sharp rise in concern with crime,” Mr Stolper said.

“This drop in community sentiment and confidence in national direction represents a huge challenge for federal and state governments. It’s clear the community is not yet satisfied with the policy responses, particularly relating to cost-of-living and on the vexed issue of housing affordability and there is softening support for their energy transition plans”.