A $13.2 BILLION building and construction stimulus action would drive over $30 billion in new economic activity and create more than 100,000 new jobs across the economy, according to new EY economic modelling commissioned by Master Builders Australia.

Denita Wawn, CEO of Master Builders said, "We are seeking stimulus not subsidies from government. We want National Cabinet to urgently implement this independently modelled stimulus package and establish a special task force to fast track commencement of construction activity.”

EY modelling shows that a $13.2 billion investment by governments in a Master Builders proposed stimulus package would mean:

  • $30.9 billion in GDP from the $13.2 billion investment;
  • Creation of 105,500 jobs in construction and across the economy;
  • $17.6 billion in expanded construction activity (new dwelling starts, renovations and commercial construction activity).

"Building and construction is shaping up to be one of the industries worst hit in the long term by the COVID-19 economic crisis. We know from previous downturns that it takes four times longer for our industry to recover than the rest of the economy,” Ms Wawn said. 

"This economic crisis is not the result of a market failure; it is the result of the lockdown imposed by governments in response to the public health emergency of COVID-19. We are asking our political leaders to show the same courage and vision in supporting our industry as they showed in responding to the health emergency,” she said.

“Work for builders and tradies in 2020/21 is fast evaporating and the indications are that 2021/22 will not be much better. There is no time to spare in meeting this threat to the viability of nearly 400,000 building business and the jobs of 1.2 million people employed in our industry.

“We also want to see a dedicated building and construction industry taskforce established to oversee the implementation of the stimulus action plan. For stimulus to occur building activity needs to commence," Ms Wawn said.

"Builders and tradies cannot sustain their businesses and jobs on promises. We have seen that governments can fast track construction activity in response to natural disasters and COVID-19 is shaping up as an economic disaster."

EY was commissioned to model a stimulus package comprised of the following programs:  

A $40,000 uncapped the new home building grant.

  • $17 billion in additional economic activity resulting from $5.2 billion investment by government.
  • The creation of 58,311 jobs right across the economy almost replenishing the 77,580 jobs lost in construction since the start of the Covid-19.
  • Delivering 14,000 extra new homes. 

Resilience renovation program (funding for renovations to make homes resilient to natural disasters or to make homes more accessible).

  • $7 billion in economic activity for $4 billion investment by government.
  • Creating 24,036 jobs.

For commercial programs (programs including funding for cladding/asbestos rectification, a10% drop in developer charges, 5% increase in government spending in health, defence and education)

  • · $6.8 billion in economic activity for $4 billion investment by government.  This excludes wider economic benefits in relation to health, safety and building quality.
  • Creating 23,118 jobs.

www.masterbuilders.com.au

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UPSIDE Realty CEO and founder, Adam Rigby, is concerned about the trend for older Australians to live in their homes years longer than is suitable for them, because they fear market uncertainty and the costs associated with selling. The outcomes are affecting young families that, in the past, would  have bought into those types of homes.

“This is one person living in an otherwise empty six-bedroom house – there are more than 100,000 underused houses in NSW and Victoria alone,” Mr Rigby said.

“The increased expenses associated with running these homes is dangerously eating into retirement funds and locking families and first-home buyers out of the market.” 

The latest ABS data shows that 49 percent of Australians are living in ‘under-utilised’ dwellings – in houses with two or more empty bedrooms. This number increased throughout the property downturn last year, Mr Rigby said, and has now spiked with the drop in sales volume led by the COVID-19 outbreak.

“In the last month we have seen a 28.7 percent decrease in sales volume compared to 2019, a year which was already substantially down, compared to previous years. This stalemate has been going on for the last 18 months or more.

“Seniors keep delaying a downsize because they are unsure about the market and they know they will be slugged with a huge tax.”

Mr Rigby noted that Australia was unique in the world in terms of property transaction costs. 

“The high cost of sales transactions and stamp duty urgently needs to be addressed if the government is serious about improving affordability and assisting in the nation’s economic recovery," Mr Rigby said.

In Victoria, homeowners who pay $680,000 for a home have to come up with a further $35,870 in stamp duty. In NSW, homeowners buying for the same amount have to pay $26,032 in stamp duty. In Queensland, the stamp duty on a home of the same price is $16,450.

Upside Realty is a fixed-fee real estate company disrupting the industry in seven markets across the country, including Sydney, Melbourne and Canberra. Home vendors work online with an experienced agent to sell property for a fixed fee of $8,900 for private treaty or $9,700 for auction.

https://upside.com.au

 

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DOUBLE DIGIT unemployment for the next few years, a plunge in Gross State Product and slow recovery are the headline findings of a new Flinders University analysis of the impact of the COVID-19 pandemic on South Australia.

The research suggests economic stimulus will be required beyond the expected six months of the JobSeeker and JobKeeper support to assist workers, families, businesses and organisations to endure the extended effects of the tough measures that have been necessary to curb the virus’s spread.

The Flinders University’s Australian Industrial Transformation Institute director, professor John Spoehr said is is a recession and the outlook is grim, urging the state and federal governments to consider all options. 

"There’s no way of sugar coating it – the measures we have had to take to tackle the coronavirus crisis are having a profound impact on our state’s economy and employment and will continue to do so until at least 2024," Professor Spoehr said.

"Some 61,000 people will lose their jobs, notwithstanding the JobKeeper initiative. If they’re factored in, the total number of impacted jobs may be as high as 110,000.

"Unemployment will more than double from 52,000 to 117,000 in the current quarter and remain relatively high for the medium term. Peak unemployment is expected to reach 13.3 percent and remain above 10 percent at the end of 2023.

"Gross State Product (GSP) will be 14.8 percent lower this quarter than it would have been without the COVID-19 restrictions, and recovery will be slow, with GSP remaining 6.4 percent lower than would otherwise have been the case at this time next year," Prof. Spoehr said.

"Our earnings from interstate exports will fall 18 percent and our overseas export earnings will plunge 23.5 percent.

"The direct shock to the state economy totals almost $5.1 billion. Importantly, some sectors will be more affected than others. Amongst the biggest employment sectors in this state are the ones most affected – retail, education and training, and accommodation and food services – with their losses far outweighing the growth experienced in other sectors such as hospitals, health care and telecommunications.

"South Australia isn’t alone in this challenge – indeed, the actions necessary to contain the novel coronavirus have had profound impacts nationally and globally, with sharp declines in economic activity and escalating unemployment. However, our state is facing this crisis from a base of underperformance relative to other states, with lower GSP and lower employment growth than the nation as a whole," he said.

"Although the outlook is grim, our earlier emergence from the health crisis and bold action so far is a great advantage. The Australian Government is undoubtedly considering a range of options; substantial public investment in a national industry modernisation program with a focus on infrastructure such as hospitals, education and digital infrastructure would help breathe life back into the economy.

‘The State Government has the opportunity to leverage this with an economic recovery and jobs plan underpinned by further investment in social and physical infrastructure, including industry catapults to accelerate the uptake of advanced technologies and skills."

Prof. Spoehr said courage was needed to halt the coronavirus in its tracks, and similar courage is central to overcoming the ensuing calamity.

"Considerable investment and stimulus will be fundamental to durable recovery. There are fates worse than debt at times of great economic hardship, particularly when interest rates for government are at historic lows," Prof. Spoehr said.

The report Impact of COVID-19 on the South Australian economy and employment – 2020 to 2023 can been read in full at this link.

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THE HEALTH and wellbeing of the 372,000 men and women working in the State resources sector is the priority for the Queensland Resources Council (QRC) and its member companies in response to the novel coronavirus (COVID-19), accordong to QRC chief executive Ian Macfarlane.

Mr Macfarlane said the QRC COVID-19 Working Group today shared information and responses to the virus with a focus on adhering to the advice from health authorities for all men and women working in the resources sector, their colleagues, their families and their communities.

“As an industry, we are following the advice of health authorities to minimise the impact on the one in seven working Queenslanders whose livelihood is linked directly or indirectly to the resources industry,” Mr Macfarlane said. 

“The QRC is in direct contact with Queensland’s Chief Health Officer Jeannette Young and both the state and federal resource ministers Dr Anthony Lynham and Keith Pitt.

“The Prime Minister, through his National Cabinet, announced mine sites as essential activities and the Queensland Government today reiterated the importance of the sector and amid current conditions it was an “essential service” to Queensland. 

“The QRC welcomed the announcement by the Palaszczuk Government to allow all Queensland companies to defer payroll tax payments for six months, in response to COVID-19, will boost much needed cash flow to thousands of companies across the State.

“Companies are already taking steps to slow the spread of COVID-19 as we do all we can to keep our workforce and their communities healthy. New procedures include health questionnaires for visitors/suppliers, temperature measurement at mine site entries and before flights to mine sites, improved separation procedures including head office staff working from home, staggered crib breaks, and no non-essential visitors to mine sites. As well, where possible, essential service crews such as Emergency Response and Pump Crews are being keep in isolation from broader workforce," he said.

“In order to ease pressure and help lighten the load on health workers in regional areas from people presenting for COVID-19 testing, resource companies are also waiving requirements for Doctors Certificates for general illness leave.

“As the COVID-19 situation evolves here and around the world, it will be critical for our industry – like all Australians – to heed the advice from health authorities.

“It is also critical as an industry we continue to devote our full attention to implementing the processes and procedures in accordance with the latest advice.

“While these are turbulent times amid the COVID-19 response, the resources industry will continue to play its central role in the economic productivity of the state and lives of all Queenslanders," Mr Macfarlane said.

“QRC will continue to work on a full range of industry issues, but we cannot afford distractions from what is essential at this time – responding to the global pandemic that is COVID-19.”

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QUEENSLAND'S first direct international data and telecommunications connection to global markets came a step closer this week with the completion of the cable landing station at Maroochydore on the Sunshine Coast.

The cable landing station will house the connection point for the international submarine cable with landside communication networks and is a vital piece of infrastructure in a project that will deliver much needed diversity for Australia’s international communication needs. It is also expected to bring significant economic benefits for the Sunshine Coast and Queensland.

Sunshine Coast Mayor Mark Jamieson was joined by Premier Annastacia Palaszczuk and Minister for State Development, Manufacturing, Infrastructure and Planning Cameron Dick on September 26 to mark the completion of the $7.2 million facility.

Mayor Jamieson said the completion of the cable landing station marked another milestone in the delivery of the Sunshine Coast international broadband network. 

“Unlike traditional cable landing stations that are normally non-descript buildings out of view from the general public, our landing station is designed to reflect council’s design vision for the Maroochydore city centre,” Mayor Jamieson said.

“Our Sunshine Coast will offer the fastest data and telecommunications transmission from the eastern seaboard of Australia to Asia once the submarine cable comes ashore and is in service next year.

“It will help to position our region to become Australia’s first Digital Trade Hub – taking a region-wide approach to data and digital connectivity which will benefit a wide cross section of businesses and industries," Mayor Jamieson said.

“Projects such as the Sunshine Coast International Broadband Network enable our region, its economy and our community to be well-positioned to respond to the rapidly evolving demands of the 21st century.

“When completed, this network will provide direct international data and telecommunications from the Sunshine Coast – the only location in Australia outside of Sydney and Perth to provide this direct international connectivity. 

“This will afford a significant step-change to the Sunshine Coast’s attractiveness as an investment location," he said.

“As the first local government in Australia to secure an investment in an international submarine cable, our council is yet again at the forefront of thinking outside the square, securing new revenue sources and pursuing opportunities to generate economic and employment growth as a major dividend for our residents, thus ensuring we continue to be Australia’s healthy, smart, creative region.”

DIGITAL BOOST TO REGIONAL GROWTH

The landing station is part of the Sunshine Coast International Broadband Cable Network being delivered through $15 million in support from the Queensland Government’s $175 million Jobs and Regional Growth Fund and $20 million from Sunshine Coast Council.

Almost 865 jobs are a step closer as the landing-station for the $35 million Sunshine Coast International Broadband Network is completed.

Premier Annastacia Palaszczuk said the project is facilitating the direct landing of a new undersea internet data cable at Maroochydore on the Sunshine Coast and will generate almost $1 billion for the state economy.

“This $7.2 million cable landing station is the gateway to better internet connectivity for Queensland businesses,” Ms Palaszczuk said. 

“Better connectivity means faster processing times for bigger data and more jobs. The cable will be able to provide Australia’s fastest data and telecommunications transmission speeds to Asia and the second fastest to the USA.

“It pitches Queensland firms to the forefront of the digital economy and will be a major drawcard for businesses and investment. We announced $15 million in funding to support this project in 2017 and we are now seeing the benefits.

“This is an investment that plans for the future and opens the opportunity for the jobs of the future here on the Sunshine Coast,” Ms Palaszczuk said.

State Development Minister Cameron Dick said the Palaszczuk Government was pleased to partner with Sunshine Coast Council to deliver this transformative project for the region and the state.

“Our data needs will only increase as we continue to attract new investment to Queensland and further diversify our economy,” Mr Dick said.

“Landing this international broadband cable directly on the shores of the Sunshine Coast will ensure we’re able to maximise every opportunity the digital era presents for our state.”

Robert Linsdell, managing director of Vertiv (Australia and New Zealand) said through the development of the cable landing station, Sunshine Coast Council is taking a huge step towards future-proofing the region’s digital future.

“The importance of investing in the right internet infrastructure cannot be overstated, particularly as we enter a new era of IoT and smart cities, where reliable connectivity will be paramount to all aspects of our daily lives,” Mr Linsdell said.

The international broadband network is exactly the kind of infrastructure needed to continue that growth, enable increased connectivity and enhance the Sunshine Coast’s and Queensland’s position as a leading technology and business hub.

“Having a vision for these new technologies is one thing, but council is going further by making this important investment and bringing its vision to reality.”

This is one of the Sunshine Coast's list of what the Mayor calls the region's "innovative region-making projects".

These include::

  • The Sunshine Coast Solar Farm – which has enabled the Sunshine Coast Council to become the first government in mainland Australia to offset 100 percent of its electricity usage through renewable energy
  • The Sunshine Coast Airport Expansion Project – which includes delivery of a new longer, wider runway which will enable direct access to new markets in Asia, the Pacific and other locations in Australia when the runway is completed and in service in 2020
  • Maroochydore City Centre – Australia’s only greenfield CBD and the nation’s truly smart city with technology and digital infrastructure solutions built in from the ground up
  • The Automated Waste Collection System at the Maroochydore City Centre – Australia’s first CBD-wide underground automated waste collection system
  • Establishing Australia’s first tripartite blue carbon initiative which will provide new opportunities and a sustainable future to our Blue Heart - over 5000 hectares of largely agricultural land in the Maroochy River Catchment.

Fast facts:

  • Sunshine Coast Council is facilitating the landing of a new international submarine cable to Maroochydore by mid-2020.
  • The project includes the installation of a 550km undersea fibre optic cable which will connect the Sunshine Coast to the 9700km Japan-Guam-Australia (JGA) submarine cable.
  • The cable, which is laid on or buried under the sea floor, will connect to the cable landing station adjacent to the new Maroochydore City Centre.
  • The cable landing station has the capacity to cater for four submarine cables and houses 24 data cabinets.
  • Security is a key consideration and the building has 20 cameras.
  • The cable landing station has electricity supplied from two different sources to reduce the risk of power outages and two 500kva generators as a backup power supply.
  • The Sunshine Coast International Broadband Network project will help stimulate local business, generate new investment, and improve telecommunications diversity to Australia’s east coast.
  • The cable will help to future proof the Sunshine Coast’s telecommunications capacity and increase the region’s smart city capability by ensuring access to important data networks.
  • The Sunshine Coast International Broadband Submarine Cable Project is forecast to deliver up to 864 new jobs and stimulate $927 million in new investment in Queensland.

www.sunshinecoast.qld.gov.au or view the project webpage for more information.

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THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell said the Federal Government’s support package for bushfire-affected small businesses will help viable small businesses get back on their feet.

“The Federal Government is responding to the needs expressed by small business representatives at the roundtable last week, with a suite of measures designed to assist small and family businesses deal with the extraordinary challenges they are facing as a result of the devastating bushfires,” Ms Carnell said.

“Immediate tax-free cash grants of up to $50,000 are available to eligible small businesses that have sustained damage as a result of the fires. 

“That’s not just businesses that have burned down, but also those that have lost stock as a result of power outages for instance.

“Insured small businesses with less than 20 full time employees, can claim expenses not covered by their insurance," Ms Carnell said.

 “Concessional loans of up to $500,000 are available to small businesses that have suffered either significant asset or revenue loss.

“These loans will have no repayments due for the first two years, with no interest accruing in this period. Beyond that, an interest rate of about 0.6 percent will apply and small businesses have up to 10 years to repay.

“A further $3.5 million will be spent on establishing a Small Business Bushfire Financial Support Line, which will be helpful in providing basic information to small businesses," Ms Carnell said.

“However small businesses really need a tailored financial recovery plan. Without it, the chances are they won’t survive.

“We will continue to push for a government grant that enables small businesses to go to their trusted advisor for a customised strategy. 

“In the meantime, fast-tracked infrastructure and a commitment to ‘build back better’ is absolutely vital," she said.

“As part of the re-build, all levels of government should be procuring from local businesses wherever possible.

“We broadly welcome the government’s efforts to help small business and will continue to advocate for measures to enable small businesses to get on with getting back on track.”

www.asbfeo.gov.au

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NEW Australian Brueau of Statistics (ABS) figures demonstrate that the challenges facing Australia’s building industry are mounting, Master Busilders Australia has warned.

Master Builders highlighted there has been a 7.3 percent drop in the value of building work approved across the country during July – the weakest monthly result since late 2016.

Master Builders Australia CEO Denita Wawn said, “Building activity is being hit by low expectations around the economy’s short-term growth prospects. We want to see government policies such incentives for businesses to invest as well fast-tracking infrastructure construction to help kickstart  activity.” 

Master Builders Australia chief economist Shane Garrett said, “Last month saw the number of approvals for new homes falling to its lowest since January 2013. This was driven by a reduction of some 19.6 percent in new apartment/unit approvals compared with June.

"Approval volumes in the high-density part of the residential building market have not been this depressed since the middle of 2012.

“Up until recently, commercial building activity had been one of the economy’s good news stories. However, things are moving in the wrong direction here too. In July, the value of commercial building work receiving approval declined by 9.9 percent compared with the previous month,” Mr Garrett said.

“Right across the spectrum, there appears to be a real absence of confidence and today’s figures confirm that building activity is paying the price,

“People and businesses also need tangible evidence that things are moving forward. Getting work started on major infrastructure projects as soon as possible would visibly demonstrate that better days are ahead for our economy,” Mr Garrett said. 

“As well as offering an instant boost to flagging demand, the installation of new infrastructure unlocks possibilities and opportunities, and allows for the creation of more homes and new businesses – the nuts and bolts of economic growth." 

www.masterbuilders.com.au

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