HOW WILL THE COVID-19 STIMULUS SUPPORT CONSTRUCTION

How will the COVID stimulus support construction?

It will still take a long time to recover from the damage COVID-19 has caused not just in construction, but every industry worldwide. The Australian government has unveiled two stimulus packages along with a variety of initiatives to help cushion the blow of the COVID-19 pandemic on the economy. In this article  we cover off how these actions will benefit the construction industry, both in short term solutions and longer term projects.

Nearly one in ten Australians work in construction, so the importance of the industry on our economy can’t be understated. On March 12th, a $17.6 billion stimulus package was unveiled, supporting mostly welfare, pensioners and small businesses. Ten days later, a $66.1 billion package was announced, again with a focus on those on pensions, social security and SMEs, designed to keep small and medium-sized Australian businesses open during economic hardship. Eight days after came the announcement of the $130 billion JobKeeper initiative, designed to supplement workers’ incomes and keep more people in their jobs. Apprentices are usually the first to feel the brunt of economic downturns, so JobKeeper will hopefully be effective in keeping our young workforce employed. 

Throughout all the initiatives and stimulus packages, the construction industry will be supported through the following programs:

• Up to 70,000 eligible employers are able to get a wage subsidy worth 50% of apprentice or trainee wages paid from January 1, 2020 to September 30;
• Increasing the asset write-offs threshold for businesses earning more than $500 million and accelerated depreciation deductions;
• Small and medium-sized businesses turning over less than $50 million will get a $2,000 to $25,000 payment as well as wage subsidies to hire and retain apprentices;
• Cash flow support to employers, whereby the Government is providing up to $100,000 to eligible SMEs that employ people, with a minimum payment of $20,000;
• The recently announced homebuilder scheme, which will fund grants worth $25,000 for eligible singles and couples planning to build or renovate hones between June and the end of December.

The Reserve Bank said the package combined with historic low rates, infrastructure spending and an expected recovery in residential construction could support the economic fall-out from COVID-19.

While the federal government has given its support in the form of two stimulus packages and JobKeeper, state governments have announced further measures as a response to reduce the impact of the pandemic as well. 

• The ACT has provided a range of support measures for businesses and households, including funding for capital works projects;
• NSW has made changes to planning and building requirements, waiving various fees and charges, while giving $1.6 billion in support for jobs and small businesses. The government has also committed to continuing to deliver its infrastructure program;
• The NT government announced a $65 million recovery package, including incentives for home renovations and support for workers;  
• QLD is providing businesses with assistance in payroll tax and land tax, along with support measures for commercial landlords and tenants;
• SA announced two stimulus packages, with $1 billion committed. The package includes payroll and land tax relief, and funding for public housing;
• The TAS government is providing assistance to construction businesses with access to a range of measures that support apprentices, reduce the cost of running a business and stimulate housing activity;
• WA has announced a $1 billion package for health services, along with assistance for payroll tax, waiving fees and charges for households, and special assistance for apprentices; and
• VIC has announced a range of assistance relief measures, and in what is hopefully a sign of things to come from other state governments, the Victorian government recently announced a $2.7 billion ‘Building works blitz’. The program will create 3,700 jobs for those in the construction industry, focusing on building and improving education infrastructure across the state.

With billions of dollars in support coming from both federal and state levels, the construction industry has the tools to deal with the downturn caused by the COVID-19 pandemic. Coates Hire will continue to support essential services throughout  and we have the equipment and expertise to support your next project. 

What are your thoughts on the support measures being put in place? Please leave a comment on our LinkedIn.