This bill implements the commonwealth government's HomeBuilder grant scheme in South Australia and incorporates amendments to the First Home and Housing Construction Grants Act 2000 (the FHOG Act) relating to objection and debt recovery provisions. The commonwealth HomeBuilder scheme provides grants of $25,000 to build a new home or substantially renovate an existing home where the contract has been entered into between 4 June 2020 and 31 December 2020.
The commonwealth government are seeking states to administer the HomeBuilder grant scheme within their individual jurisdictions. The national partnership agreement on HomeBuilder has been developed to facilitate the implementation of the scheme. The national partnership agreement on HomeBuilder requires jurisdictions to take reasonable steps to ensure that the eligibility criteria have been met and that there are appropriate integrity measures in place, including auditing and compliance processes. Where possible, states are requested to align these processes with existing arrangements for FHOG.
The FHOG is administered under the FHOG Act. The same act has also been used to administer other housing assistance programs, such as the First Home Bonus Grant and the First Home Owners Boost in South Australia. Where possible, the relevant provisions of the FHOG Act will be extended to apply to and in relation to an application for a HomeBuilder grant as if it were an application for an FHOG, subject to modifications and exclusions prescribed by the regulations. Where the provisions of the FHOG Act do not apply to the HomeBuilder grant, entitlement to the grant and the eligibility criteria will instead be determined by the Commissioner of State Taxation and published on a website determined by the commissioner in accordance with the terms of the national partnership agreement on HomeBuilder.
The proposed amendments to the objection provisions of the FHOG Act will address a potential unfairness cited by Executive Senior Member Stevens of the South Australian Civil and Administrative Tribunal in the matter of Anastasia Marinis v the Commissioner of State Taxation at paragraph 78 (it is an unreported decision) and to ensure that South Australia is aligned with all other jurisdictions. New South Wales, Victoria, Queensland, Western Australia, Tasmania and the Northern Territory all permit grant recipients to object to a decision to impose a penalty. Payment of grants has ended in the Australian Capital Territory for transactions entered into after 30 June 2019, notwithstanding the Australian Capital Territory also permits grant recipients to object to a decision to impose a penalty.
The proposed amendments to the debt recovery provisions of the FHOG Act will address a technical anomaly and allow RevenueSA, and consequentially the State of South Australia, to adequately protect its position irrespective of whether a home has been completed on the property for which the grant was paid. Without an amendment to the debt recovery provisions of the FHOG Act, RevenueSA's only option is to pursue relevant debts via criminal prosecution.
I take this opportunity to thank the members of the Master Builders Association and the Housing Industry Association who took the time to meet the Department of Treasury and Finance and RevenueSA and provide valuable feedback on the HomeBuilder grant. I express my appreciation also to the members of this house for agreeing to accommodate the advance of this legislation. I think we are all of the same mind in wanting to utilise, for the benefit of South Australians, the offer on the table from the commonwealth, which the government has agreed to sign up to.
With the commendation and acceptance of this bill, it will enable South Australia to take advantage of that benefit on the table and also to be without penalty themselves because of what inevitably happens in these circumstances, that is, the different thresholds and regimes of eligibility. I thank members for allowing the progress of this matter in this abrogated form and otherwise commend the bill. I have a short explanation of clauses I seek leave to insert without my reading it.
Explanation of Clauses
These clauses are formal.
Part 2—Amendment of First Home and Housing Construction Grants Act 2000
4—Insertion of section 6A
This clause inserts a provision allowing the Act to apply to applications for HomeBuilder grants as if they were applications for first home owner grants (subject to modifications specified in the provision and any others prescribed by the regulations).
5—Amendment of section 25—Objections
This clause extends the objections provision to an applicant or former applicant who is dissatisfied with a decision of the Commissioner to impose a penalty under section 39(2) or (3).
6—Amendment of section 40—Power to recover amount paid in error etc
This clause substitutes a new section 40(3) so that the liability for an amount payable under section 40 will be a first charge on the applicant's interest in the land on which the home was built or was to be built (rather than referring to the applicant's interest in 'the home for which the first home owner grant was sought').
Schedule 1—Transitional provisions
This transitional provision clarifies that an objection allowed by clause 5 of the measure may only be made in respect of a decision made after the commencement of that clause.
The Hon. S.C. MULLIGHAN (Lee) (11:09): I rise to speak on behalf of the opposition about the First Home and Housing Construction Grants (Miscellaneous) Amendment Bill introduced with some haste by the government, understandably so. This is a scheme recently announced by the federal government as part of their efforts to try to provide some economic stimulus to the economy, given the significantly suppressed levels of economic activity and employment that we are seeing as a result of the restrictions required for the coronavirus response.
The bill makes a relatively small number of amendments to the First Home and Housing Construction Grants Act 2000, which members may recall was introduced to give effect to a first-home grant, just as the goods and services tax reform was to be introduced. There was significant concern about the impact on house prices and housing affordability as a result of the introduction of that tax, particularly for first-home buyers, and so a grant scheme was introduced. If my memory serves me correctly, I think it was initially funded by the federal government, or at least partly funded by the federal government, and then at a later date taken over by the states.
That grant has taken many different forms over the last 20 years. It has been a $7,000 grant, it has been a grant that has been available for the purchase of existing homes and it has been a grant that has been available for the purchase of new homes and for the construction of new homes. At the moment, it is only available for eligible first-home buyers who are looking at building a new house or buying a newly constructed house, and that recognises the economic benefits of housing construction in South Australia.
There are significant economic benefits of housing construction. There are nearly 70,000 people employed in South Australia, or, I should say, there were nearly 70,000 people employed in the construction industry in South Australia before the coronavirus. Like many other industries, the construction industry has taken a hit in activity and also in levels of employment. That is not just happening here, of course; it is happening around the country, hence you can understand, in that context, why the federal government has been motivated to introduce this scheme.
The HomeBuilder scheme provides a $25,000 grant towards a new home build of up to $700,000, including land, or towards significant renovations valued at at least $150,000, up to a limit of $750,000, where the property's value does not exceed $1.5 million. These, in the context of the South Australian housing market, are heady numbers. It certainly would not be everyone who, in the middle of a pandemic and with concern for their own economic circumstances, would be incentivised to proceed with a $150,000 renovation to their home, even with the offer of a $25,000 kicker from the federal government.
The program across the country is expected to provide 27,000 grants at a total cost of $680 million, with the scheme expected to add in total only 10,000 new properties—10,000 housing construction efforts and 17,000 renovation efforts. In South Australia, if you figure that we would capture somewhere in the order of our proportional share of that, maybe we would end up with something in the order of 2,000 or 2,500 renovations or home constructions.
It is good, I think, that the federal government is doing something in this space. Members would recall that I have spoken previously about how important it is to recognise the federal government's willingness to step in with increases to the JobSeeker payments and the new JobKeeper payments, and I think that sentiment can be carried over here for the HomeBuilder scheme.
Of course, many people, myself included, would query the parameters of this scheme, whether it is well targeted. These thresholds, as I have just mentioned, seem quite high and quite significant in the context of the South Australian housing market. Perhaps there could have been some effort from the federal government to allow some discretion amongst state governments to better target what sort of renovations and home builds this money could be used for. On the other hand, I also appreciate the desire for national consistency and clarity about how much the cost of this scheme would be in total for the federal government.
In the current dire economic circumstances in which we find ourselves in South Australia and across the country, I think it would be foolish to look a gift horse like this in the mouth. So it is in that context as well that this opposition says that we are willing to support this bill and support it speedily in its passage through this house. I received a briefing on this yesterday from the Department of Treasury and Finance and the Treasurer's office where I indicated willingness to consider moving through all stages of this today.
That has somehow translated itself into the Treasurer of the other place telling his upper house whipping meeting that he had spoken with me directly and we had already agreed to the arrangements both down here and up there. Nonetheless, here we are with a commitment to consider this. I want to say a couple of things, though, about government assistance in this area at this time in the state's economic struggles.
It has been well publicised that we have lost over 50,000 jobs in South Australia over the last three months due to the restrictions imposed on business and the community in the need to try to stop the spread of the coronavirus. Governments across the country have moved to introduce economic stimulus packages of varying types with different initiatives in them to try to support economic activity in their jurisdictions.
In South Australia, the government has long trumpeted that it announced initially $350 million of economic stimulus spending in the second week of March and then a further $650 million two or three weeks later. Of that $1 billion, we have had the Premier confirm in the media that by no stretch is all of that money new money to the forward estimates. Much of that funding was already allocated to existing initiatives for agencies across the forward estimates.
I have placed on the Notice Paper each sitting week questions on notice to the government to try to get some answers about how much of those announced figures of $350 million and $650 million are actually newly committed expenditure, as opposed to existing initiatives merely pulled forward as admitted by the Premier. We still do not have a response—a breach of standing orders, I believe, or sessional orders, which perhaps might need to be raised in another format to attract the attention of the Premier, although we understand in the last 24 hours his plate is rather full at the moment.
We do have some responses from the Department of Treasury and Finance, who appeared at a Budget and Finance Committee hearing—a select committee of the other place—where they provided the first and only detail we have had on breaking down the two funds that were announced: the Business and Jobs Support Fund, which was to be allocated $300 million by the government; and the Community and Jobs Support Fund, which was to be allocated $250 million from that. As at 14 May, which of course is six weeks or so out of date, the government was still to allocate nearly $260 million of its announced stimulus funding: $94 million from the Business and Jobs Support Fund and $163 million from the Community and Jobs Support Fund.
I would have thought, as the monthly employment figures are released by the ABS and as the fortnightly wages figures are released by the ABS and the full horror of the impact on the state's employment market becomes clear—not only losing more than 50,000 jobs over a three-month period but now reaching more than 180,000 South Australians unemployed or underemployed—that the government would be moving with more alacrity when allocating these funds, which it claims to have set aside in the state budget, let alone getting them out the door. We also heard evidence in the Budget and Finance Committee that there is no minister responsible for overseeing the expenditure of these funds out into the community.
You can understand why those people employed in the construction industry are very worried about their futures. They know that there has been a role for state and federal governments over the last 20 years at least to step in and support their industry through things like the First Home Owner Grant, through things like stamp duty reductions or exemptions at different times for first-home buyers and perhaps for people at the other end of the housing ownership experience, perhaps to downsize their homes.
You can understand, when they hear reports that $¼ billion remains unallocated for economic stimulus funding from this government, them asking why on earth the state government is not putting its own funds in to try to also stimulate the housing construction industry. We had a government announcement late last year, just before Christmas, by the housing minister and by the Premier that purported to be a massive housing stimulus. We were told of 1,000 new homes over a 10-year period or, on average, 100 homes a year and the repackaging of already budgeted for housing maintenance money to be spent to stimulate the housing industry.
Agreeing to fund 100 houses a year over the next 10 years is not really an economic stimulus. To rely on that when questions are raised about what the government is doing to support the housing construction sector is simply not good enough. This government has funds available, so we are told by the Under Treasurer, or at least it did as of several weeks ago, and it has an industry crying out for more support.
You only had to listen to the evidence given to yesterday's Budget and Finance Committee to hear the frustration of the housing construction representatives that their industry had suffered a significant downturn already before the coronavirus. As of early 2018, home construction has continued to decline in South Australia. To some extent, some people have been willing to engage in home renovations and that has kept some tradies busy, but certainly the housing industry is under significant stress, and it is regrettable that the government in South Australia continues to refuse to put its hand in its pocket to take some of these funds that it claims are available as part of its stimulus packages and put them towards this industry.
Repeatedly, the opposition has called on the government to do just that. We have suggested a temporary suspension of stamp duty for first-home buyers to try to encourage them to make the decision to enter the housing market now, particularly at a time when we have the lowest interest rates on record, or at least the lowest interest rates for many, many decades. That in itself, particularly if it was quarantined for new home builds or purchases of newly constructed homes, would provide some further stimulus to the industry.
We had also asked that there be no further increases to fees and charges in this sector, as well as of course all other sectors. After making that request of the government, after putting out that suggestion about how the government could continue to support people while they are doing it tough at the moment, the government, for the first time in memory, without a press conference and without a press release, snuck out its annual increase to fees and charges.
That was particularly hard felt by tradies in the housing construction industries because of course last year they suffered a 10 per cent, in many cases, or a 5 per cent increase in the fees and charges they have to pay each year, whether it is for registration, whether it is for licensing, whether it is for vehicle registration, whether it is for the registration of other vehicles like trailers, and so on. So we have seen over the last 12 months repeated efforts by this government to make life harder for this industry, rather than make it easier.
I would implore the government again to remove its figurative finger and get on with the job of assisting the housing construction industry because, as those housing industry representatives so accurately put it, it is not just the people who pour the foundations, put up the framework, lay the bricks or install the electrical cabling or the plumbing, or do the first and second finishes, who do the roofing, the landscaping, the fencing and so on; it is also the people who are buying that home, who are then taking ownership of it and need to fill that home with furnishings, with whitegoods and so on. That provides a tremendous benefit to all those retailers who sell homewares and electrical goods in South Australia, which, arguably, down the track provides some benefit to the state because 10 per cent of that being paid in GST eventually partially makes its way back into the state's coffers as well.
So many thousands of jobs are supported throughout the South Australian economy when the housing construction industry is doing well. I think the government has an opportunity to do far more here, and without additional support from the state government the government can expect to hear not just calls from the opposition for them to do more but also the ongoing criticisms of those housing industry representatives whose pleas to do more the government continues to ignore.
Other states around the country, when it comes to housing stimulus packages, are of course meeting this challenge. Western Australia have provided $20,000 grants and also stamp duty rebates. They are constructing new social housing dwellings and so on. Similarly, this is also happening in Queensland and Tasmania. New South Wales have focused the $¼ billion dollars that they are providing on housing maintenance, and Victoria similarly is looking at additional maintenance spending and rapid housing response projects, particularly for people who are at risk—Aboriginal Victorians or people experiencing homelessness and leaving state government services. These are different examples of what is happening around the nation with other states that are doing what we are not doing here and that is providing more support for the housing industry.
Of course, as I mentioned earlier, we still have a First Home Owner Grant, or whatever it is called these days, which tends to support somewhere in the order of 2,500 to 3,000 people a year. If that support, which costs in the order of $40 million or $45 million a year, were extended or doubled, for example, then we could be basically doubling the level of assistance that we expect to get from the commonwealth through their grant program.
We have heard recently from the Housing Industry Association that building numbers are expected to be down by 65,000 homes this year across the country, and the Master Builders Association forecasts a 40 per cent decline in home construction activity next financial year, resulting in roughly 60,000 fewer dwellings to be built, so both the MBA and the HIA nationally are forecasting significant downturns for the industry. We heard from the local leadership of the Master Builders Association only yesterday in the Budget and Finance Committee. They said:
We have been saying for some time that obviously in particular the housing and commercial sectors were being severely challenged, and that was before COVID-19 even hit this country. We are off a low base already, let alone the economic impacts and the effect on the economy that the current situation has caused. When you come off a low base already and the predictions were that we weren't going to be doing that well this year and next year, this has just compounded the situation even further.
In relation to the dwelling commencements, the Master Builders Association of South Australia expects a decline of about 38 per cent and, while HomeBuilder may plug some of that decline, it certainly will not cover it all. Mr Markos went on to say:
We have put plenty of submissions in to the government. We have had conversations, obviously, with the Treasurer around this, coupled with eliminating stamp duty for first homebuyers, and increasing the First Home Owner Grant for country people in particular. That would help country employment. More tradies would be out there building more homes. But, at this stage, it is the government's policy that there will be no reduction in stamp duty whatsoever and there will be no increase to the First Home Owner Grant or any increase specifically for country regions, which is disappointing.
The Master Builders of South Australia believes that, if the state government matched the HomeBuilder scheme, it would enable a further 2,000 to 3,000 houses to be built, which would help fill the hole currently being generated by COVID-19, an estimate basically the same as the one I just provided. The Housing Industry Association has also stressed the urgency of housing stimulus by stating that the pipeline of current work is predicted to begin to dry up in August, with some smaller builders reporting that they have only four to six weeks of work ahead of them. Stephen Knight from the Housing Industry Association stated yesterday that they expect a 30 per cent decline in the next few months.
As I said, the contribution of housing and construction to the economy is very, very significant and it is the National Housing Finance and Investment Corporation's research unit that anticipates it has the second largest economic multiplier of all 114 industries that make up the Australian economy and that, for every $1 million spent on residential construction, nine jobs are supported while three new ones are created. The building jobs report, which draws on the most recent available data from the 2017-18 ABS statistics, found that for $1 million of output in residential construction it supports about $2.9 million worth of consumption across the broader economy.
In that context, we know that there is a significant benefit to be had by further assisting the housing construction industry. Josh Frydenberg and Scott Morrison are doing it in their own way. As I said, some people will draw some criticism about the parameters of the scheme, but it is a scheme that should be supported nonetheless. The question remains: why is the state government not doing something here that can support this industry further?
We have already seen the government here delay responding to calls to support industries. It was very early on in the COVID restrictions that the Leader of the Opposition, the member for Croydon, and I visited the Kings Head Hotel calling for more support for the tourism and hospitality sectors. We have seen those sectors, particularly in tourism, absolutely decimated in terms of activity, and we have seen hospitality venues across the state struggle dreadfully with the restrictions that have been imposed on them.
Of course, we understand the need for those restrictions, but the fact remains that if the government is going to come and shut down your business then I do not think it is unreasonable that the government should be providing a reasonable level of support to those industries, as well as a well-articulated pathway to being able to reopen those businesses.
It was only a couple of Sundays ago that I stood with the owner of one of the small venues in Leigh Street, five weeks after the Premier had claimed that he would find a solution for those small venues, and it took a further two weeks, particularly for those operators to be calling for the government to act, not so much in terms of financial assistance but to reopen their premises. I hope that this is another occasion where, if there is sufficient pressure from the opposition, if there is sufficient pressure from business owners and operators, the government will heed the call to do more to support the housing industry.
We know that if enough pressure can be applied to this government then they will fold, just as we have seen on the plan to abolish 1,000 bus stops and cut dozens of bus routes. We hope that ongoing pressure here might provide a brighter future for the many thousands of South Australians who are employed in the housing construction industry and that whatever benefit is to be achieved from the federal government's HomeBuilder scheme can be multiplied with support from the state government.
The Hon. V.A. CHAPMAN (Bragg—Deputy Premier, Attorney-General) (11:37): I wish to thank the opposition for an indication of their support to the bill, which will facilitate this initiative announced by the commonwealth government and which has been formalised in the national partnership agreement on HomeBuilder.
For the record, the importance of this agreement in relation to who it is to apply to, how much and what obligations there are for the scrutiny and the formal responsibilities of each party in the reporting arrangements, people can view for themselves. However, I bring to the attention of the house the significance of the eligibility of the party that is subject to the principles of eligibility, which are as follows:
12. Owner-occupiers may only receive the HomeBuilder grant once. In addition, States should have regard to whether the property was previously built or renovated with assistance from a HomeBuilder grant, as it is intended that grants will only be made available once per title.
13. Eligible owner-occupier(s) will be the natural person(s) who is/are listed on the certificate of title of the property and resides or intends to reside at the property.
13.1 Where applicable, States should also have regard to their existing requirements for policies such as first home owner grants, in order to align definitions.
I have referred to that already.
13.2 Applicants must either be a single natural person, or two natural persons in a couple.
14. In determining whether a property is a person's principle place of residence, States should have regard to the duration of time an individual will be remaining in the property.
14.1 Where applicable, States should also have regard to their existing requirements for policies such as First Home Owner Grants, in order to align definitions. Evidence of this may be a statutory declaration from the applicant.
I have referred to the time frames and the value of properties for which the building contract must be between so I will not refer to those again.
We have heard from the opposition, in their usual manner, about the importance of fiscal responsibility and laced with examples of them not being fiscally responsible in demands for contributions, to which they had 16 years to contribute. The stakeholders in this industry have not been silent in that time. It seems that the opposition have a newfound generosity in what they consider to be appropriate; this fell on deaf ears for 16 years.
I point that out because although the housing industry, as we all know, is a valuable contributor to our economy, the administration of former Tasmanian premier Will Hodgman is, I think, a masterful and demonstrably successful policy development for the economic redevelopment of that state with the use of the housing industry. A housing-led economic recovery was a key plank in that administration and it worked. It was operational and clearly and demonstrably effective during the time of the previous government.
I thank Will Hodgman for his leadership in this regard. I think he gave a contemporary and effective identification of the significance of the industry and how it can be a very positive player in economic recovery. As we have experienced the circumstances of COVID across the world and in this country, it ought to be a leading example of how we apply this to the benefit. It can be immediate. Some will say that any of these initiatives can produce unhelpful outcomes, such as the risk of an increase in the value of property and dwellings.
However, we are in a situation where there is a demand for economic recovery stimulus. We should look at the housing industry as something that is available and is keen to operate. When we consider the fact that South Australia is clearly on the move and keen to have a policy of population growth and economic recovery and advancement—not just to get back where we were, but to continue to grow—we think this is a good idea. That is why our Treasurer has signed up to it as part of a plank of recovery measures.
The opposition has seen fit to suggest the dire declining forecast from the industry of a 40 per cent drop in approvals. We have heard of the potential decline; that is always a concern, and we need to watch it. However, to give some confidence to the house on how resilient this industry has been, even during COVID, I just wish to place on the record the most recent data on building approvals for April 2020 as compared with April 2019. Housing approvals dropped 1.2 per cent, and other dwellings, which I am advised largely relates to apartments and flats, have actually risen by 4.6 per cent.
I do not know why people in South Australia are choosing to invest in apartments as distinct from detached dwellings or houses. It may be that there is a renewed interest by the X and Y generations in different types of accommodation and that they are the buyers; I do not have a profile on who the purchasers are in this regard. Even without this initiative, there has been a slight drop in relation to housing approvals but quite a significant increase for other dwellings. It does demand of us some further consideration of that data in order to be satisfied, as a government, in the policy initiatives we might consider in terms of how we might advance this industry.
This is not a situation, as depicted by the shadow treasurer, where, if it were not for some maintenance and renovation, tradespeople in this industry would be in dire circumstances. The fact is they are still continuing to build, and I am comforted by this information, as I think the house should be. This industry has demonstrated a level of resilience. It might actually be building a slightly different product or moving towards that, but is it for us to make a judgement regarding how people choose to develop the accommodation and shelter they propose in the 21st century? I think not.
We have had to accept, over decades, the changed needs for accommodation: more single residence dwellings, more circumstances where the numbers in households and families have significantly reduced—which relates, of course, to the fact that we have fewer children or our children have fewer children in the 21st century. We have to consider, accommodate and support industries that will build shelter and accommodation for what the next generations want.
In addition, we have to understand and have respect for—as we do on this side of the house—the dwellings of choice of others in our community, including our mature aged who, post direct family responsibilities, may be looking for dwellings that are smaller, more nimble in the sense of maintenance and with the capacity to lock up if there is a choice to travel and the like.
Whilst there has been a bit of an impediment on that in recent months, I am sure people in that bracket are looking for the opportunity to travel again. They will, and that is great, but they also do not want to have to pay for the maintenance of family homes. They are looking for a different style of dwelling, and it is up to the industry to design and build those, to provide for that demand as our population moves through its areas of responsibility and makes choices about the types of dwellings they want.
Unlike the doom and despair promoted by the opposition, I congratulate the industry on its resilience. Of course, as a member of government I acknowledge that forecasts are to be looked at and borne in mind, but we are confident that this is an industry that has demonstrated resilience and that continues to demonstrate that. We will continue to work with the commonwealth government, and our Premier will continue to work during the COVID recovery under the federal council, to try to make sure we complement that.
I agree with the shadow treasurer that it is important to consider what other jurisdictions do in this space, particularly if they are successful, but I can honestly say that I think the most successful to date has been former premier Will Hodgman, and I thank him for his leadership in this regard. This government has demonstrated its commitment to put the industry in a position where it has the capacity to develop those options.
I do not think there are any other immediate matters I can raise. I know some commentary was made in a contribution to this debate regarding the demands of the hospitality industry. As the person in charge of liquor licensing, by the Attorney-General's role under the stewardship, on a day-to-day basis, of Commissioner Soulio, I am very proud of what our government has announced in relation to support for those industries during the COVID period, and the advance of outdoor permitted areas for small bars, for which a number of applications have been received and approved.
This government will go down in history as doing more for Leigh Street than the Manchurian pear trees that the former government put in and then ripped up within a couple of years. They probably died—I do not know. They seemed to be another piece of infrastructure or contribution, or one of those light-bulb moment decisions, and then that failed. We are very proud of the contribution that we have made in this regard. With those few comments, I commend the bill to the house.
Bill read a second time.