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Australians were already splurging on home improvements long before the government announced its HomeBuilder scheme, new data shows

Jack Derwin
  • Australian spending on home improvements and renovation has surged during the pandemic, according to consumer data analysed by Zip.
  • The latest figures show the demand for tradespeople and things like security systems were already hot before the HomeBuilder scheme was announced.
  • Meanwhile other businesses like pubs and bars that have not recovered revenues are at risk of losing JobKeeper and other support measures later this year.
  • Visit Business Insider Australia's homepage for more stories.

The Morrison government's HomeBuilder program appears to have missed the boat before it even picked up the tools.

The scheme which will doll out $25,000 grants for new home builders as well as renovations appears to be too little too late, if new spending data is to be believed.

Collated from 1.8 million Australians, the data shows a home renovation boom took place before the HomeBuilder scheme was even announced.

"We have been particularly interested in the bolstering of spend in the past quarter on building and renovation, which is interesting in light of the recent government stimulus package," Zip co-founder Peter Gray said in the analysis.

"Security installation, roofing, gardening, outdoor home improvement and, home pools and spas all saw significant increases in consumer spending in May 2020, while trade services like electricians, plumbers and painters were all sought after," Zip notes.

Installers of security systems saw a whopping 133% surge in demand, while tradies enjoyed a 30% bump in business in May, the data suggests.

While it's doubtful such jobs cost the more than $125,000 it takes to qualify for HomeBuilder, the boom in spending does indicate tradespeople perhaps aren't in desperate need of a $680 million government scheme. That's before you even delve into the program's significant shortcomings. Of course, it doesn't reflect on the new home builds aspect of the scheme.

Contrast that however with other sectors that look to have government support withdrawn and it appears that Canberra may be out of touch with the average punter.

"Forced to pivot significantly during May, spending in pubs and bars, cafes and restaurants remains significantly lower than seasonal averages. While adaptive models have helped reclaim some of the lost revenue, the gap won’t be closed until lockdown measures are completely pulled back," Zip notes.

Too bad then if JobKeeper, which helped prop up many of those businesses, is simply axed before those revenues are restored.

Not that all hospitality outfits are in the same boat. Spending at pubs and bars is still down more than 74% on pre-COVID levels. Restaurants and cafes, meanwhile, are faring better on balance, down 19% and 39% respectively.

"There is a clear two-speed recovery emerging in the business economy, based on what consumers are spending their money on," Gray said.

"While large shopping centres have resembled Christmas-sized crowds in recent weeks, pubs and bars are still limited to 50 patrons. This disparity of easing will continue to impact the business landscape, and particularly the small to medium-sized enterprises, who are fronting large costs to adjust their places of trade."

Slashing the hours of bartenders and baristas then, whose wages were subsidised significantly during the shutdown, is one place business owners may start cost-cutting once JobKeeper is retracted.

With gym and fitness spending still half of what it was, personal trainers could perhaps be added to that list.

Despite calls from some economists, however, the government has ruled out using its $60 billion JobKeeper saving to extend the program further.