Federal Investment in Construction
Much has been made of the federal government’s recent efforts to restart much of the economy by pumping funds into large-scale investments. This would be put into action alongside other federal and regional initiatives in the hope of really kicking off an economic restart that would start to pull the country out of the massive debt that has been generated throughout the Covid-19 pandemic.
It has to be said that Australia has been one of the developed nations suffering the smallest economic impact of the coronavirus, with policies already in place which have proved invaluable to many businesses. However, being the least affected doesn’t by any means make the outlook any better.
One of the major initiatives that’s been put together by the federal government is the “HomeBuilder” scheme. This scheme will provide stimulus funding to people looking to build or renovate homes. However, the question has to be asked, will this really be enough to get the construction sector going again?
Much of the criticism levelled at this specific scheme has been directed at the very strict criteria for receiving the funding in the first place. This has been said to limit the stimulus funding only to those who would have already been looking to renovate or rebuild their homes, and really leaves everyone else out in the proverbial rain.
The knock-on effect of this is that the work being jump-started by the stimulus funding isn’t work that would have otherwise not taken place, but just work that would have taken place later. In essence, the scheme is not generating any new revenue for construction, only speeding up existing processes. Whether this was the aim of the federal government while designing the criteria, we’re not sure we’ll ever find out. However, many experts across the sector have expressed their views that in order for the scheme to be a success, it needs to be opened up to others.
On the other hand, state (and territory of course) governments have been putting into action their own schemes to try to give the construction sector the push it needs. Northern Territory’s answer to this conundrum has been a $150 million pipeline that will connect Manton and Darwin River Dams. This will allow Northern Territory to secure a safe water supply for the future and allow both dams to continue safe operation. The happy by-product of the project will also be a variety of construction and maintenance jobs that will reinvigorate the territory’s industry.
The territorial government is also hoping that with some success, the scheme will attract federal and possibly international funding. It is also hoped, but not yet assured, that the contracts for construction and maintenance will be structured and bundled in a way that they can be split between multiple businesses. This would allow the project to support smaller businesses across the board rather than hand a large contract to one large firm.
What more can be done?
This isn’t really a question we can fully answer at the moment, as we still don’t know the full impact of the pandemic on the budgets. We also don’t know how each state and territory government will be reacting and attempting to recover.
Our hopes are that the recovery efforts are focused on local business, rather than funnelling funds into larger firms that don’t need it quite as much. Whatever the outcome of the federal and state-level investments, we have firm belief that the Aussie construction sector is on its way back on to its feet.