Budget a mixed bag for building

12 June 2018

MASTER BUILDERS has cautiously welcomed today’s Queensland Budget announcement, but warned it’s a mixed bag for the building industry.

Master Builders Deputy CEO, Paul Bidwell, said that while the big injection of spending via the $45 billion infrastructure program, with a significant $250 million at education, is a godsend for commercial builders, the residential housing sector won’t fare as well.

“It’s a triple whammy for housing builders, with the Treasurer calling an end to the First Home Owners Boost, the recently announced waste levy and the impact of land tax increases – which together will raise the cost of building a new home,” Mr Bidwell said.

“We’re incredibly disappointed that the boost has not been extended further, as there is no denying it was a foot in the door for first home buyers. The rise in first home buyers entering the market since it was introduced in July 2016 is striking, as is the flow-on effect to the building industry.

“With first home buyers numbers already on the decline, which is reflected in Housing Finance data figures released by the ABS today; there is no doubt that this decision will have a detrimental impact on a number of Queensland building businesses.

“The waste levy will also have a direct impact on anyone looking to build a new home or renovate an existing one. Once it’s introduced in 2019 it will add up to $1,400 to the cost of new construction and renovation.

“Land tax increases will further increase the burden, increasing the cost of a new home to the tune of around $800-$1,000. All in all, that’s over $2,000 in unnecessary additional expenses as a result of this budget.

“For the commercial sector, the $45 billion in infrastructure spending is good news, although we are still waiting to understand how much will be earmarked for public sector buildings – which is essential for job creation in the construction industry.

Master Builders had called for a Public Sector Building and Construction Capital Expenditure Benchmark and for a guarantee that additional funding would be spent on public sector residential and non-residential buildings, like hospitals, schools and social housing.

“We are delighted to see the commitment of $11.5 billion for 2018/19 around the state, but the big question for us now is how the total spend will be split between spending on new public sector residential and non-residential buildings, engineering construction (such as roads and rail), and the associated ‘fittings and fixtures’, such as trains and equipment.

“We’ve been calling on the State Government to increase expenditure on public sector building and construction – residential and non-residential buildings together with engineering construction – to reach the 25-year average as a proportion of GSP,” Mr Bidwell said.

“Following that, the next biggest next hurdle is ensuring the allocated budget is spent. In previous years the government has failed to spend budget allocations, which is a missed opportunity when it comes to job creation and the key infrastructure projects that Queenslanders need.

“By our calculations, the underspend for 2017/18 is currently projected to be around $333 million, which equates to 3,077 missed job opportunities. One specific example of this being the $86 million allocated to the Nambour Hospital in 2016/17, which is only projected to commence in 2019.”

Read the 2018 Budget Highlights.

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