Building industry lobby groups have welcomed several measures contained in the Commonwealth budget, applauding measures relating to home ownership, the fuel excise levy, training and apprenticeships infrastructure investment and fuel excise levies.

Commonwealth Treasurer Josh Frydenberg has delivered the government’s final budget before the May election.

The budget papers reveal that the fiscal deficit will fall $134.2 billion in 220/21 to $79.8 billion in 2021/22 and $78.0 billion in 2022/23.

However, net debt will grow from $592.2 billion in 2020/21 to $864.4 billion b 2025.26.

From the building and construction sector’s viewpoint, important initiatives include:

• A $17.9 billion program of infrastructure works in 2022/23, and an increase in the ten-year pipeline from $110 billion to more than $120 billion.
• Several measures to boost housing and home ownership, including a more than doubling of the Home Guarantee Scheme (which enables first home buyers to buy homes with as little as 5 percent deposit without needing to pay lenders mortgage insurance). to 50,000 places per year, $2 billion in additional support for social and affordable housing through the National Housing Finance and Investment Corporation.
• New apprenticeship support measures. These include:
  • A three month extension to the Boosting Apprenticeships Commencement and Completing Apprenticeship Commencements Scheme through which employers can receive 50 percent wage subsidies for the first twelve months of taking on apprentices. The scheme will now run until June 30.
  • A new scheme which will apply from July 1 which will continue apprentice subsidies albeit at a lower rate. Known as the Australian Apprenticeships Incentive System, this will enable employers to access wage subsidies of 10 percent for first and second year apprentices and 5 percent for third year apprentices in occupations which are on the Australian Apprenticeship Priority List. Employers who hire apprentices in occupations which are not on the priority list may receive hiring incentives of up to$3,500. Meanwhile, apprentices whose occupations are on the priority list may receive support payments of $1,250 every six months for the first two years ($5,000 in total).
• A temporary reduction (next six months) of 50 percent or 22 cents per litre in the fuel excise levy.

Building industry lobby groups welcomed the budget.

Master Builders Australia CEO Denita Warn said the measures provide much-needed help for small and medium-sized builders.

In particular, Warn said the temporary relief from the fuel excise levy will help builders and tradespeople to fill up their utes after many reported fuel price increases in the order of 25 to 30 percent during the March quarter.

“Overall, it’s good to see the Government is responding to the plight of many in our industry who are being squeezed by steep cost increases and delays which are impacting their cash flow caused by a perfect storm of international and domestic factors which has driven a surge in demand for building activity,” Warn said.

Urban Development Institute of Australia National President Max Shiffman says the budget backs the housing and construction industry to drive the economic recovery and start tackling the crisis in housing affordability.

“The Federal Government Budget delivers on some important areas which will drive the economic recovery, bringing back migration and stripping away some of the barriers to delivering housing supply,” Shiffman said.

Australian Constructors Association CEO John Davies said the infrastructure spend shows that construction will continue to play a lead role in the nation’s economic recovery.

However, he cautioned that productivity improvements were needed to maximise value from the amount spent.

Pointing to a lack of productivity improvement for the sector over the past three decades, Davies analysis by BIS Oxford Economics undertaken for the ACA shows that even halving the productivity gap between construction and other major industries could unlock $15 billion in annual savings.

Davies called on the government to require all Commonwealth funded projects to be rated on completion of key reform metrics to drive improved outcomes and share lessons learned through the ACA’s proposed Future Australian Infrastructure Rating (FAIR).