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Warnings PM's $25k rescue plan could 'saddle' Aussies with debt

Lucy Dean
·4-min read
Pictured: Scott Morrison, Australian house being built. HomeBuilder package concept. Images: Getty
Scott Morrison's HomeBuilder plan has been savaged. Images: Getty

Prime Minister Scott Morrison’s fourth stimulus package, targeting the construction industry has been described as more of a “floatie” than a life raft due to one of its eligibility requirements.

The $688 million HomeBuilder package offers $25,000 grants to Australians building or renovating a home, provided they meet certain eligibility criteria.

Running from Thursday until the end of 2020, Australians building homes can access the grant provided the land and home value is no more than $750,000. And Australians renovating can access the grant provided the renovations are worth between $150,000 and $750,000 and the home itself isn’t worth any more than $1.5 million.

Eligible Australians can only earn up to $125,000 as a single or $200,000 as a couple.

But according to the Labor party, there’s a glaring error with the scheme.

Shadow Housing Minister Jason Clare said the package was “not a lifeboat, it’s a floatie”.

“At the start of this week they talked about renovation rescue and how you’re going to be able to renovate your kitchen and renovate your bathroom. It turns out it’s all rubbish, there’s not many battlers in the suburbs of Australia that have got a lazy $150,000 to renovate their kitchen or their bathroom,” he said.

He said Australian tradies will suffer, and in an additional statement, said more needed to be done to address social housing.

As it stands, there’s a shortfall of around 500,000 social and affordable housing dwellings in Australia.

Speaking to Yahoo Finance in May, Women’s Community Shelters CEO Annabelle Daniel said a key element in addressing rising rates of homelessness is building more social and affordable housing.

Clare said it was “incredibly disappointing” that the government didn’t put any money from that package towards social housing.

“HomeBuilder will not build a single home for people who need them the most – mums and kids fleeing domestic violence, veterans sleeping in parks, or essential workers,” he said.

“The less done now to protect tradies’ jobs and support the hundreds of small and family-run businesses, the harder and longer the recovery will be.”

Opposition leader Anthony Albanese made similar statements.

Albanese, who grew up in public housing, said the scheme was a “cop out”.

“During the coronavirus crisis, homeless people had to be put up in hotels because we don’t have enough social housing in this country. At a time when we need urgent stimulus, why would the Government ignore this national priority?” he said.

The Australian Council of Social Services (ACOSS) also raised concerns about the equity of the scheme.

She said the scheme leaves vulnerable people “out in the cold” as winter bears down, and called for more investment in social and affordable housing.

“There is no argument that the construction sector needs a shot in the arm, but this money will not go where it is most needed. It will largely benefit those on middle and higher incomes undertaking costly renovations, without any related social or environmental benefits,” ACOSS CEO Dr Cassandra Goldie said.

“The risk is that it will saddle people with huge debts that they may not end up being able to afford, especially given the uncertainty of the job market.”

She said the focus should be on ensuring all Australians have a home, rather than providing support for “well off” people to upgrade their homes.

“There is also dire need for repairs and renovations of existing social housing dwellings that workers could get started on next week,” Dr Goldie added.

“We could create even more jobs by installing solar and improving energy efficiency in low-income homes, which would cut energy bills for people and families, who will otherwise freeze through winter.”

‘The issue is the project’: Morrison defends scheme

Responding to questions on the topic today, Morrison said the aim of the scheme is to protect jobs.

“No one measure, no one single thing solves every single problem, but everybody working together, and all of those programmes working together is what enables Australia to make its way back,” Morrison said.

“The issue is the project. It's the project that creates the jobs and the income limits we’ve put on the test for people to be involved in this are the same that we put in for the First Home Loan Deposit Scheme.”

The prime minister said social housing was the states’ responsibility.

“The states are actually investing in social housing and as they should, that’s their job, and we've supported them through programmes like the National Housing Finance Investment Corporation. But these are the things that we can do.”

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