The enormity of the economic impact of COVID-19 was set out in stark numbers in last week’s economic and fiscal update presented by Federal Treasurer, Josh Frydenberg.
Almost three decades of uninterrupted economic growth has been stopped in its tracks by the pandemic, with Australia’s GDP forecast to drop by 3.75 per cent this year before picking up by 2.5 per cent in 2021.
Unemployment is forecast to peak at more than nine per cent in the December 2020 quarter, and the budget deficit will grow to $85 billion in 2020 before ballooning to $184 billion in 2021.
Government support for individuals and businesses affected by COVID-19 now totals $289 billion in fiscal and balance sheet measures.
Against the backdrop of the biggest disruption to the Australian and global economy since the Great Depression, Australian governments are continuing to roll out measures designed to stimulate the economy and protect jobs, including for the property industry.
“Property is our biggest employer and contributes over 13 per cent of GDP. It’s vital that governments keep their unwavering focus on measures that will help industry create jobs, support growth and drive our economic recovery,” says Property Council chief executive Ken Morrison.
The Property Council has welcomed the extension of the Australian Government’s JobKeeper program for a further six months to March 2021.
“Making JobKeeper available beyond September will provide businesses and their employees with some certainty for the coming months,” Ken Morrison says.
“JobKeeper support has been vital for our industry as well as other parts of the economy. Forty-five per cent of those surveyed in our recent ANZ Property Council Survey said they had accessed the scheme, and a majority supported its extension.
“Everyone recognises that pandemic measures such as JobKeeper can’t continue forever, but this extension is certainly appropriate,” Morrison adds.
Queensland catalyst infrastructure fund
Meanwhile, state governments have announced new measures to support housing construction and the property sector in recent days.
The Property Council has applauded the Queensland Government’s $200 million catalyst infrastructure fund which will help unlock significant private sector investment in new development.
The Building Acceleration Fund follows strong advocacy from the Property Council which proposed the catalyst infrastructure fund as a key COVID-19 economic recovery initiative.
The fund will allow applicants to apply for ‘no interest’ loans to co-fund costly trunk infrastructure, such as roads, water supply, wastewater or stormwater, required to unlock new growth fronts.
The Property Council’s Queensland executive director, Chris Mountford, says the fund will provide an immediate stimulus injection in the form of jobs and serve as a powerful economic multiplier by unlocking private sector investment long term.
“Trunk infrastructure is costly to provide and often presents a significant barrier to the delivery of new development. Many worthwhile projects get delayed or scrapped as supplying the initial trunk infrastructure is too expensive, making projects unviable,” Mountford explains.
NSW stamp duty concessions for new first home buyers
The Property Council also applauds the West Australian Government’s $5.5 billion WA Recovery Plan to drive the state’s post-COVID-19 economic and social recovery and generate a pipeline of local jobs.
The plan was developed in consultation with the Property Council through participation on the State Recovery Advisory Group. It focuses on getting Western Australians back to work and delivering long-term economic and social benefits.
New investment is being targeted across key sectors including construction, manufacturing, tourism and hospitality, renewable energy, education and training, agriculture, mining and conservation.
The WA Government has reconfirmed its commitment to bring forward planning reform, building METRONET, supporting small businesses and the residential construction sector, including further investment in social and affordable housing.
It includes $2.77 billion in relief and stimulus measures already approved during the COVID-19 pandemic.
Further detail on the elements of the plan are being released in coming days and will be available on the WA Recovery Plan's website.