A strong infrastructure program, further HomeBuilder stimulus and investments to boost national resilience are just three of the measures outlined in the federal budget. What does it mean for our industry?
Australia outperformed all major advanced economies in 2020. The federal government’s total economic support in response to the crisis now stands at $291 billion or around 14.7 per cent of GDP. Net debt will peak at close to one trillion dollars over the forward estimates.
Labour market outcomes have surpassed expectations. Close to one million jobs have been added to the economy since May 2020.
The global economic recovery is also gathering pace, with stronger than expected activity in the December quarter of 2020 for most of our major trading partners. Further progress on vaccine rollouts in advanced economies, major fiscal policy support and accumulated household savings have all increased confidence. However, the pace of recovery is uneven and significant outlook risks remain.
Net overseas migration is forecast to be negative 77,000 people in 2021-22. A gradual return of temporary and permanent migrants is assumed to occur in 2022. We won’t reach a new normal of 235,000 migrants until 2024-25.
Property Council chief executive Ken Morrison says the government’s “sensible approach” of targeted support measures will continue to stabilise the economy and boost industry confidence. “But the budget papers reveal that population growth will quickly become an anchor for our economy.
The Property Council is calling for a “major upscaling” of Australia’s quarantine and border processing capacity to boost these numbers in a COVID-safe way.
Infrastructure and cities
The government will strengthen its 10-year, $100 billion infrastructure package with funding of a $15.2 billion tranche of Infrastructure Australia approved projects. This includes $347.5 million for Perth METRONET, $126.6 million for the Gold Coast Light Rail and $2 billion for the Great Western Highway upgrade from Katoomba to Lithgow.
From July 2022 a $10 billion reinsurance pool will subsidise the cost of insurance coverage for cyclones and flood damage over 10 years. Funds will be available for property insurance policies for households, strata and small businesses north of the Tropic of Capricorn.
The government has outlaid more than $2.7 billion over the course of the HomeBuilder stimulus package. Other measures include an extra 10,000 places in the New Home Guarantee and an increase in the maximum voluntary contributions that can be released under the First Home Super Saver Scheme to $50,000.
An extra $17.7 billion over five years will fund the federal government’s response to the Royal Commission into Aged Care Quality and Safety. This commitment signals the start of major changes to the aged care system.
There are also plans to lower the minimum age for the downsizer contribution from 65 to 60, and for eligible Australians to make one-off post-tax contributions of up to $300,000 per person (or $600,000 per couple) when they sell their family home.
A commitment of $1.2 billion over five years will focus on resilience, preparedness for and recovery from natural disasters. Among the measures are a new National Recovery and Resilience Agency and a $615.5 million program, Preparing Australia, providing grants to support public and private sector disaster risk mitigation and resilience.
Treasurer Josh Frydenberg outlined a further $1.6 billion commitment over 10 years to support emissions reduction efforts. Hydrogen hubs, carbon capture and storage and a $643.4 million technology co-investment facility are in the mix.
An additional $67 million will be allocated to improve existing organic waste facilities and infrastructure, as well as $11 million to support better recycling by Australian businesses through funding boosts for existing product stewardship and labelling schemes.