The Opposition is calling for a National Housing Stimulus Plan to build and repair social housing and affordable properties in a bid to protect almost one million workers relying on the construction industry. Source: Timberbiz
Labor’s plan adds to a growing chorus of industry groups, social services organisations and academics pushing the government to focus specifically on home building, including the Australian Forests Products Association, the Master Builders Association and the Urban Development Institute of Australia.
Labor housing spokesman Jason Clare said the pipeline of work in the housing construction industry was drying up and would result in a sharp decline in work for tradespeople and small and family businesses unless action was taken.
“This should include governments working with the private sector and superannuation funds to invest in more social and affordable housing and repair existing social housing.”
AFPA CEO Ross Hampton said Australia’s softwood timber processing industry supplied most of the renewable timber products for new houses built in Australia and a substantial portion of multi-unit and commercial construction.
“Our member companies are already feeling the impact of the slowdown in construction and we estimate sawn timber demand will drop by at least 50 per cent over the next six months,” he said.
Any stimulus for new home construction was felt right along the timber supply chain and that includes regional Australia where many of the sawmills were located.
“There are more than 45,000 Australians employed in the sector and in many cases this job is the primary bread winner of the family,” Mr Hampton said.
“You help one part of that supply chain and everyone benefits.
“The housing construction sector is the engine room for growth and jobs in Australia’s economy and the softwood timber processing sector is the ‘canary in the coal mine’ signalling changes in demand. It’s now feeling the impact of a slowdown, as are companies right along the supply chain.”
“Any large recovery stimulus package focused on increasing new housing demand also supports jobs and communities in parts of Australia where softwood processing is the major economic driver,” Mr Hampton said.
Construction industry fund Cbus has publicly said it has $2.5 billion ready to spend on housing, infrastructure and local companies within the next six months.
Property Council of Australia chief executive Ken Morrison has asked the government to consider demand-side stimulus to encourage people to buy newly constructed housing to help boost jobs.
“This is a real area of need and while industry and governments have been magnificent in allowing construction to continue, beyond current projects there’s not much in the pipeline,” he said.
“The risk is that right at the time the National Cabinet wants the economy to be picking up, construction is a drag on recovery and not a driver.
“We’ve asked government to focus on the demand-side problem facing construction and what measures can be taken to pull forward demand,” he said. He would not say whether his proposal included grants for new home buyers.
Property development lobby group Urban Taskforce chief executive Tom Forrest warned the industry’s workbook would be exhausted by the end of 2021 and in previous recessions the tender market took up to 24 months to recover.
“One of the reasons why stimulating private or public sector construction is particularly good for the economy is because it’s jobs rich,” Mr Forrest said, adding infrastructure projects took a comparatively long time to start and employed fewer people for the cost.
He is hoping to fast-track public and private sector investment in building projects such as housing, retail, schools, hospitals and offices.
“We’d welcome social, public and affordable housing where there’s a need,” he said.
“I think the recovery will be by-and-large a private sector recovery as the government won’t have the ability beyond the stimulus we’ve already had.”
A major issue for the private sector, he said, was risk-averse lending from major banking institutions. Mr Forrest intends to lobby the government to work with the Australian Prudential Regulation Authority to ensure developers and builders can get access to funding for major construction projects.
“APRA and the government need to tell the banks they can take a bit more risk,” he said.
UBS economist Carlos Cacho forecasts housing commencements to fall to 120,000 in 2020, down from 174,000 in 2019.
“While a collapse like this would normally suggest a shortfall in housing supply, given the fall in migration and underlying housing demand we expect, we’re forecasting the supply and demand of new housing to be largely in balance,” Mr Cacho said.
“That said, we continue to expect housing focused stimulus to be announced in coming months.”
