4th June, 2020

HomeBuilder stimulus: A lifeline for tradies

The Morrison Government has announced its fourth stimulus package, which will offer tailored assistance to the construction industry and is set to send thousands of tradies back to work.

In an attempt to support a flagging construction industry, the Federal Government has unveiled its latest stimulus initiative, dubbed ‘HomeBuilder’, which will increase construction workflow drastically by creating enough new building jobs to make close to 400,000 tradies busy again, 7news reports.

The $688 million dollar stimulus package, which is the fourth of its kind, will offer cash grants of up to $25,000 to people who looking to build a new home or undergo new renovation projects.

HomeBuilder fine print:

According to The Guardian, in order to be eligible, singles need to earn $125,000 a year or less based on a 2018/19 tax return or later, and couples need to earn under $200,000. Building contracts need to be executed between 4 June and 31 December 2020.

In addition to this means-based eligibility test, applicants need to be intending to build a new home as a principal place of residence valued up to $750,000 including the land, or planning to renovate an existing property, with the upgrade valued at between $150,000 and $750,000.

Existing properties will need to be worth less than $1.5 million before the renovation, and construction must begin within three months of the contract date.

READ: 14 tax deductions not to be forgotten in 2020

Cash grants for homemakers equals support for tradies

Leading up to today’s announcement, Prime Minister Scott Morrison said that the aim of this stimulus package is to create and support jobs in the construction industry, as well as create new opportunities for painters, plumbers and electricians.

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“This is about targeted taxpayer support for a limited time using existing systems to ensure the money gets used how it should by families looking for that bit of extra help to make significant investments themselves,” the prime minister said.

It is hoped that through offering these cash grants, prospective and existing homeowners will be incentivised to contract construction companies and sole traders to get to work right away, and subsequently stimulate these pandemic-stricken industry sectors.

READ: Where can tradies seek stimulus support?

In an attempt to further bolster the construction industry, 7news also reported the Federal Government plans to allocate an additional $1.75 billion of stimulus to the NSW local government so it can expedite its Western Sydney Airport metro service project, a venture that is expected to create some 14,000 new construction jobs. However, no concrete details of this element of the stimulus have been formally released.

The Master Builders Association has been lobbying for government support in the background, warning that without government support, construction contracts are expected to fall by a staggering 40 percent, ABC News reports.

When commenting on the government’s latest stimulus, Master Builders chief executive Denita Wawn said that the package “provides a huge relief”.

But, Wawn still urged the Government to keep an open mind on further support if things continue to head in their current trajectory, saying that the uncertainty surrounding the pandemic makes it difficult to predict how big economic downturn will be, and how long it will drag out for.

MYOB encourages all business owners impacted by the COVID-19 lockdown to consult with an accountant or specialist advisor as soon as possible. You can find advisors near you here.