Crunching the Numbers and Balancing the Books
When Treasurer Jim Chalmers handed down the Federal Budget on Tuesday evening, there was an air of trepidation in the industry as rumours abounded regarding potential changes to major project funding and investment, the cost-of-living pressures, and the need to address the nation’s housing supply and affordability challenges. Inertia’s Scott Clements casts his eye over the numbers that matter to the industry.
“We saw a well-considered and thoughtful budget on the whole, but as with any budget, there is always room for improvement,” said Scott. “There was much-needed support for the most vulnerable members of society, and the Treasurer has struck the right balance as he walked the tightrope of managing inflation, balancing the books, and helping reduce the cost-of-living pressures. I’m not worried about the inflationary aspects of the measures announced, and I don’t believe they will stimulate discretionary spending; it’s more about shoring up the basic living standards of our most vulnerable Australians.”
“Where there is room for improvement is within the Buy to Rent development sector. The tax changes announced tinker at the edges and don’t go far enough, with the budget forecast supporting an additional 150,000 dwellings, but only over a 10-year period. It’s a drop in the ocean in the grand scheme of things and will not have enough of an impact on the current housing shortage, particularly against the forecast net migration of 1.5m over the period of 2022 to 2027.”
“The budget forecasts that the construction of new homes will fall to a ten-year low in this same period, which is concerning as housing supply will remain a handbrake on affordability. The consequence is that the market may continue to heat up for renters as migration numbers increase.”
“Migration is welcomed. We need additional skills in our industry, which will help relieve capacity constraints in the construction and development sector, and with a complimentary training strategy to encourage more talented students to think about working in the industry in a trade or profession.”
“However, the biggest change that would make the budget a success is for State, Federal, and local governments to work closely together to ensure supply constraints are overcome, and there is action and not just talk around the nation’s long-term housing strategy for capacity and affordability. Otherwise, the legacy we will look back on in 2032 won’t be a great Olympics and economic transformation; it will be about homelessness and social housing, not something we want to make the headlines with the world looking on or something we should accept in a wealthy developed nation.”