Coronavirus: Backbench frets at HomeBuilder bringing deeper debt

Several government MPs have voiced concerns about the government’s $668m HomeBuilder stimulus package.

Nationals Senator Matt Canavan has voiced reservations about the stimulus.

Several government MPs have voiced concerns over the government’s $668m HomeBuilder stimulus package and ballooning post-COVID public debt in a weekly tele-town hall meeting with Scott Morrison.

Coalition backbenchers interrogated the plan to hand out $25,000 grants to new home builders and renovators at both a tele-hook up with the Prime Minister on Thursday and a gathering of the backbench economics committee the night before.

More than 39,000 individual viewers have visited the HomeBuilder site since it went live, with the construction industry saying the package will lead to a $15bn boost in economic activity.

Some developers have sounded the alarm on the design of the package, saying it may provide only limited support to new apartment construction, given a key requirement to start building within three months of a contract being signed.

Unit developers are facing price drops of up to 20 per cent, with property billionaire Harry Triguboff saying luxury units had the largest falls, with a smaller decline at the lower and medium level.

Mr Morrison defended HomeBuilder’s tight parameters on Thursday, saying its $150,000 cap would stop it becoming a repeat of Labor’s home insulation scandal after the global financial crisis.

“You’ve got to make sure you’ve got the licensed trades ­people who are involved in this program and that people don’t set up schemes just to take advantage of it,” he told Sydney’s 2GB radio.

“And it’s one of the reasons why we’ve put the program at $150,000 or more on renovations.”

Nationals senator Matthew Canavan — one of those to voice reservations about the stimulus package aimed at propping up one million construction sector jobs — told The Australian he worried more government spending could put the nation in a weaker con­dition to recover from the coronavirus-induced economic crisis.

“I completely get what the government is trying to achieve but I am very concerned about where our public debt levels are heading and where our private debt levels are already at,” he said.

“We have been in a very healthy space but things can change very quickly, and I’m worried we are putting ourselves in a weaker position if asset prices in Australia were to fall.”

Former deputy prime minister Barnaby Joyce echoed Senator Canavan’s concerns about growing public debt

“I understand how Keynesian stimulus packages work, but the government doesn’t have money. Taxpayers have money. You’ve got to pay it back,” he said.

“We’ve got a very high private debt and our redeeming feature has been our low public debt … I’m concerned about the complexity of trying to pay back that debt.”

LNP MP Warren Enstch, who holds the North Queensland seat of Leichhardt, said he wanted to see the scheme regionalised and for some fixes to the renovation ­aspects of the grants, which he strongly supports.

“When you’re talking about $150,000, it makes a difference when comparing a house in my electorate and a house in Sydney. It’s important all the regions are able to get access to this scheme.”

Outer-Brisbane MP Andrew Laming also backs the scheme, but said he wanted rules around the timing of construction to be ­relaxed to get around local bureaucracy and get the building sector moving as quickly as possible.

“Our banking approvals are taking up to eight weeks and local government approvals are that much again,” he said.