Some Pain, Some Gain for Construction Industry in Budget 2

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Friday, May 16th, 2014
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On balance, the Budget should have a positive impact on the building and construction industry, but not without pain.

Overall, the Government’s roadmap to structural budget repair and a return to surplus should be a positive for business, home-buyer and investor confidence, despite the temporary Deficit Levy.

The building and construction industry particularly welcomes the Government’s $50 billion infrastructure package.

But roads are not everything and the Government will need to focus on broadening infrastructure investment to include urban investment in the post-Budget period.

Master Builders welcomes the cut in company tax while recognising that many small building firms are not incorporated.

In contrast, Master Builders is deeply concerned about the negative impact of several initiatives on the building and construction industry.

The cessation of funding for the National Rental Affordability Scheme (NRAS) makes it doubly important for the Government to find more effective methods of tackling the lack of housing supply and providing more affordable social housing.

The cessation of funding for the Tools For Your Trade program is disappointing but is offset by the Trade Support Loans for apprentices.

The phasing out of skills programs such as the Apprenticeship Mentoring Program and the National Workforce Development Fund is another disappointment which will place pressure on the Government to implement a viable apprenticeship reform program to guarantee a skilled workforce for the future.

The imposition of the fuel levy will hit tradies particularly hard because of the amount of travel they undertake. Their increased transport costs will be passed on to the consumer.

As the Treasurer has acknowledged, this Budget is “just the start” and Master Builders is looking to the Government for more detail of its National Economic Strategy in coming weeks.

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2
  1. Paul Richards

    Most of what the budget delivered was good. A pathway back to balance was good and the new roads spending will be worthwhile as long as we can afford it.

    But the idea of denying under 30 year olds dole payments for six months seems ludicrous. If they have literally no money coming in, how are they supposed to pay for things like networking to find employment, buying decent clothes to attend interviews and putting petrol in cars (or having cars running) to get to interviews, let alone putting a roof over their head or eating? We should be setting people up for success, not failure.

  2. David Chandler

    The construction industry is increasingly falling off the agenda for both sides of politics. The COAG statement in December signaled a return to the federated, fragmented nature of construction policy and representation in Australia. Governments seems to misunderstand that construction is now a global game and it needs a national response. Lifting productivity requires the unions to be put back in their place, but it requires more than the continuation of EBAs with no demonstrable management response to driving construction costs down by >20%. That risks seeing the massive spend on infrastructure that the budget initiates failing the value for money test and risks building in debt and user costs that burden Australians for decades to come.