Construction cliff still a concern in wake of big-spending budget

The Australian Institute of Architects has warned that the 2020 Federal Budget may not be enough to stop the pipeline of new construction projects drying up thereby hampering efforts to create jobs in one of the economy’s biggest employing sectors.

Institute CEO Julia Cambage said architects were the canary in the coal mine for the construction sector.

“Our members are at the very start of the construction supply chain,” Ms Cambage said. “Design is the first point from which all the other jobs flow, from engineers and surveyors to brickies, plumbers and painters.

“We have measured the impact Covid-19 has had on the pipeline of future construction projects and it points to a dramatic and widespread stalling and slowdown of work.

“This has major implications for the almost 1 in 10 people employed in the building industry.

“The 2020 Federal Budget is very much one of housing hits and misses.

“While we welcome a number of measures such as more funding for Indigenous Home Ownership, an extension of support for first home owners and an increase in the debt ceiling for the Affordable Housing Bond Aggregator, they are not enough to stave off the looming downturn in construction activity.

“Only $0.6 million over four years from 2020-21 has been allocated to boost housing demand and support the residential construction industry in the face of plummeting activity levels.

“If this Budget is all about jobs, it is hard to fathom why major stimulus opportunities such as more significant direct social housing investment and support for social infrastructure projects were overlooked, especially when they have such wide-ranging support from a majority of leading economists to community organisations.

“This type of large-scale legacy building achieves both the immediate stimulus needed for recovery while also delivering lasting benefit.

“Looking at past disasters demonstrates the enormous capacity construction has to rebuild economies and produce enduring public infrastructure. Brisbane’s Story Bridge and Somerset Dam are just two examples born of the Great Depression that are still serving the community to this day.

“The level of adversity we currently face demands innovation and entrepreneurship in the policy response for it to be truly successful and to maximise value from the vast expenditure of public funds.

“Housing, jobs and increased economic activity go hand in hand.

“As research from the Commonwealth Government’s own National Housing Finance and Investment Corporation (NHFIC) shows, residential construction has the second largest economic multiplier of all the 114 industries that make up the Australian economy.

“That’s why we urged the government to make simple but innovative policy changes such as amending NHFIC’s Investment Mandate to enable a more diverse range of affordable housing models and typologies, like Nightingale, to access its low-interest, long tenor finance while significantly boosting new supply.

“Expanding the scope of the Clean Energy Finance Corporation’s Community Housing Program and Clean Energy Home Loan initiative would have been another straightforward stimulus measure to support sustainable residential construction.

“A stronger commitment on climate action, specifically to a carbon neutral transition target date, is another piece of the policy mix that remains MIA.

“We do acknowledge and applaud the increased investment in transport infrastructure as well as community-led initiatives through further funding for the Building Better Regions Fund.

“The Institute identified initiatives to enhance and restore heritage sites as another job-intensive avenue for stimulus and it would have been terrific to see investments like the $40.6 million for the Sydney Harbour Federation Trust replicated around the country.

“This year has shown that improving resilience, in our built environment and in our economy more broadly, must be a first order priority and we look forward to hearing what more the Government has to say in response to the Royal Commission into National Natural Disaster Arrangements.”