The HomeBuilder package dishing out $25,000 to renovators and the Home Loan Deposit Scheme allowing first home buyers to purchase with as little as a 5 per cent deposit came as good news.
The two incentives, designed to stimulate the Australian economy in the wake of the coronavirus pandemic, while generous for those who are eligible, are restrictive and exclude permanent residents.
The strict time frame for HomeBuilder is a glaring problem. Eleftheria Dimitrouli, a permanent resident, said that she would have liked to make use of the scheme but – even if she were a citizen – would not have been able to do so due to the fact that ‘construction must commence within three months of the contract date’.
Even those who qualify need to hurry, because the opportunity ends on 31 December and the government has yet to put the plan in place. On Friday, following the national cabinet meeting, Prime Minister Scott Morrison said that people will soon be in a “position to access the plans”.
Australia’s Housing Minister Michael Sukkar pointed to the benefits of these incentives, however did not answer our questions on the reasons for the unprecedented differentiation between citizens and permanent residents, who until this year were privy to Medicare, Centrelink, JobKeeper and enjoyed all the advantages of citizens. A spokesman for Minister Sukkar told Neos Kosmos that, like all of the Government’s COVID-19 economic support measures, “HomeBuilder is designed to be temporary, targeted and proportionate to the challenge we face”.
“HomeBuilder has been designed to ensure the greatest amount of economic activity possible is unlocked to keep tradies in work in the second half of 2020,” he said.
The Government estimated that the program would see 20,000 new builds and 7,000 renovations, leading to hundreds of thousands of jobs in the residential construction industry.
Housing and Homelessness Shadow Minister Jason Clare refutes these promises, dismissing the scheme as “poorly conceived and inadequate” because it is extremely restrictive both in the eligibility requirements as well as the time frames.
“Not only are Australians who earn less than $125,000 a year expected to spend more than $150,000 on a renovation, they are expected to enter into a contract now, with no certainty of whether they qualify for the grant,” he said in a statement to Neos Kosmos.
The Shadow Minister is concerned that the plan, aimed at stimulating the market, will not create work for tradies as the Government had said it would when just 7,000 renovations are expected to happen at best.
“It’ll save a few jobs, it’ll help to create a bit more work, but nowhere near enough,” he said.
CoreLogic data revealed that the $25,000 grants would simply bring forward construction works that that were already planned.
Immigration Lawyer Joseph Italiano stated that the plan is “outrageous politically” and “if you’re going to renovate you will renovate even if you’re a citizen but excluding Permanent Residents is unnecessary”, especially bearing in mind the few people that would make use of the plan anyway.
• Recipients must be owner occupiers;
• Recipients must be citizens (not permanent residents);
• Single applicants must earn no more than $125,000 per year or $200,000 combined income for couples;
• Contracts must be signed by 31 December;
• Construction must commence within three months of the contract date;
• Home renovations not covered by the grant, include adding a pool, tennis court or detached garage;
• For renovations, the existing property value must be no more than $1.5 million, and the renovation must be worth between $150,000 and $750,000;
• For new builds, the house and land value must not exceed $750,000.