A statement given by Treasurer Josh Frydenberg on 23 July confirmed what was already known by most; that the COVID-19 pandemic has caused significant financial pain to the national economy. The figures revealed by the Treasurer predicts that the Federal budget will grow to a $184.4 billion deficit in the 2020 to 2021 financial year from an $85.8 billion deficit in the 2019 to 2020 financial year.
The building and construction industry is not immune from the harm such economic turmoil will cause. As such, incentives and stimulus packages such as JobKeeper, HomeBuilder and JobTrainer are incredibly important. Additional support will also likely be required in order to sustain the industry.
In particular, 12.5% fall in investment in the 2020 to 2021 financial year will have dire consequences on the building and construction industry. This is particularly concerning as the building and construction industry is crucial for a strong economy, more generally.
Denita Wawn, CEO of Master Builder’s Australia, stated, “As the industry that provides the most full time jobs in the economy we are deeply worried about the impact of the forecast fall in demand on the industry, the viability of around 380,000 of small builder and tradie businesses and opportunities for future careers for young people.”
Although the introduction of HomeBuilder has initially proven to be effective in stimulating the building and construction industry, only time will tell if it will continue to provide the necessary support the builders and contractors require to keep their businesses afloat.
Extension of JobKeeper
Despite the concerning figures announced by the Treasurer, some comfort can be found in the extension of the JobKeeper scheme.
Though originally supposed to end in September, the Federal Government has announced that the scheme will continue until at least March 2021. However, fortnightly payments will reduce from $1,500 to $1,200 after September and will further fall to $1,000 a fortnight as of 2021.
Considering that building and construction is the industry with the most businesses registered for JobKeeper, the extension will provide a necessary lifeline for many building and contracting businesses.
Introduction of JobTrainer
In addition to JobKeeper and HomeBuilder, the Federal Government has recently announced the $2 billion JobTrainer scheme. JobTrainer includes the extension of Supporting Apprentices and Trainees wage subsidy until at least March 2021.
This will provide hundreds of thousands of Australians with the means to gain new skills through retraining and upskilling into industries with an abundance of job opportunities.
Not only does this provide support to current apprentices and trainees, it also provides the school leavers’ class of 2020 with assurance that apprenticeships are still a viable option, particularly as it is predicted that the JobTrainer fund will provide 340,700 additional training places.
Funding Overview
- The Federal Government will provide $1.5 billion in funding for apprenticeship wage subsidies
- The Federal Government will provide $500 million in funding for retraining and upskilling
- State and Territory Governments will provide $500 million in funding towards course initiatives; specifics are yet to be outlined
- Extension of JobKeeper until March 2021
- HomeBuilder available until 31 December 2021, provides $25,000 towards building a new home or substantially renovating an existing home