Why the HomeBuilder package misses the mark

Scheme could have helped make our homes more sustainable and cheaper to run.

lochiel park

Trivess Moore, RMIT University and Tony Matthews, Griffith University

The federal government’s new $688 million HomeBuilder package might protect residential construction jobs but it’s a missed opportunity to deliver sustainability benefits that would save owners money in the long run. The $25,000 grant for new homes and renovations could have been better leveraged to provide broader and ongoing benefits. In particular, it could have been used to ensure homes are more energy-efficient and cheaper to run.

The grant is available for building an owner-occupied home with property values (house and land) under $750,000. Renovations costing between $150,000 and $750,000 for a property valued under $1.5 million are also eligible. Grants are means-tested against household incomes.

Building new houses better
The scheme could have required new houses to exceed minimum building code requirements to be eligible. The development industry would then have had to deliver housing to this standard or risk losing potential buyers. Using the right design and materials would mean any extra costs are recouped over time.

Heating and cooling energy use could be reduced by almost 25 per cent across capital city climate zones with minimal requirements. New houses could achieve these reductions with a solar PV system and seven-star performance rating (in line with proposed changes to raise the National Construction Code’s current six-star minimum in 2022). This would reduce utility bills and carbon footprints for householders.

The use of majority Australian-made materials could be stipulated. Local renewable energy, insulation and energy-efficiency businesses would benefit from increased demand. Job creation would follow in these and secondary industries.

The $25,000 grant cost to government would more than cover the costs of these requirements. Various Australian studies have found achieving a seven-star rating involves little if any extra cost for new houses in many locations. The cost of solar PV continues to fall.

Combining these sustainability measures through HomeBuilder would provide benefits across the lifetime of new houses.

The Cape is a Victorian development where all houses have a minimum 7.5-star performance rating. The first ones built have running costs of 15 per cent of the state average for homes of the same size. Trivess Moore, Author provided

Renovation to benefit everyone
Restricting HomeBuilder grants to renovation projects over $150,000 excludes many modest renovations like upgrading a kitchen or bathroom. It has already been called a handout for the rich.

Much of the existing housing stock in Australia has poor energy and thermal performance. Many houses are too hot in summer or too cold in winter, or both.

Installing a heat pump hot water system is one way to cut household costs and emissions. Trivess Moore, Author provided

A better and more equitable strategy would be to provide renovation grants for energy-efficiency retrofits in owner-occupied and rental housing.

Retrofits could be undertaken for a fraction of the price of the renovation grant and still help a range of trades. There would be demand for heating and cooling systems, insulation and draught proofing to be supplied and installed. Households would save on bills and suffer less from extreme temperatures.

Energy-efficiency retrofits are a cost-effective way to improve environmental performance, thermal comfort, health and wellbeing. Much of Australia’s existing housing stock could be upgraded to five stars for much less than the budgets required by the announced stimulus.

Retrofits should be determined by an in-house sustainability assessment by qualified assessors – another potential growth area. Programs like the Victorian Residential Energy Scorecard already offer guidance on best practice. Identifying the best retrofitting opportunities for individual properties would ensure each household gets best value for money.

Capturing wider benefits
A more strategic approach to HomeBuilder could help the economy and move us towards a lower-carbon future.

The need to upskill tradies and limitations of local manufacturing are often cited as barriers to improving the sustainability of Australian housing. HomeBuilder could offer incentives to overcome these obstacles. Setting higher building performance standards as a condition of the HomeBuilder grant would upskill workers and create jobs.

Tradies would have the opportunity to work on tens of thousands of houses with higher performance ratings. This would provide extensive professional experience of building more sustainable housing across the country. Local manufacturing and secondary industries could innovate and supply sustainable building materials and technologies for Australian conditions.

Improving housing sustainability would also help achieve broader federal and state government policy goals. For a start, it would help Australia achieve targets for reducing greenhouse gas emissions. It would also help with issues such as energy vulnerability and security.

As a final note, economists, housing researchers and social housing organisations argue that a program designed to deliver more social housing would provide greater benefits. Australia certainly needs to increase its social housing stock. HomeBuilder could have helped with this.

If future stimulus schemes target social housing, we suggest environmental and energy performance should be top priorities from the outset.

Trivess Moore, Senior Lecturer, School of Property, Construction and Project Management, RMIT University and Tony Matthews, Senior Lecturer in Urban and Environmental Planning, Griffith University

This article is republished from The Conversation under a Creative Commons licence. Read the original article.

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    COMMENTS

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    panos
    9th Jun 2020
    3:44pm
    yep I would have used mine to get a battery for my solar and a heat pump for hot water....
    Micko
    9th Jun 2020
    4:25pm
    so the majority of the money going to Tesla or a similar mob. Doesn't stimulate anything but an overseas company.
    johnp
    9th Jun 2020
    3:58pm
    another failure like many aspects of jobkeeper !! Not targeted in the correct manner !!
    Mootnell
    9th Jun 2020
    4:03pm
    this was NEVER about helping anyone but the wealthy. An absolute disgrace how blatant all of these grants have assisted the big end of town. Anyone else to have benefited has had to go either, further into debt,
    or inevitably have to pay back with interest.
    Micko
    9th Jun 2020
    4:23pm
    I think your article misses the point of why the $25K stimulus was introduced. They said it was to get people working in the building industry. Allowing it to be spent on a solar system, hot water system, kitchens, bathrooms and the like will see the most spent on capital supplies which are majority imported, and the lesser of the spend on the building works. With a build of $150K or above, the majority will be spent on building works, that is, into workers pockets, which was the reason for the stimulus to start with.
    Micko
    9th Jun 2020
    4:32pm
    It should be looked at as asking someone to stimulate the building industry by at least $125K and we'll contribute $25K. It is not meant to be a $25K handout for doing nothing.
    Peter H
    9th Jun 2020
    4:24pm
    Probably not designed to help many at all. Badly placed to help the Aussie Battler and the means test is likely to exclude the more affluent. A good press release for the Government until the fine print is examined.
    Bundabergian
    9th Jun 2020
    4:37pm
    It is a stupid idea aimed at supporting one industry, with no side benefits at all. How about they put it into solar PV panels for all, insulation etc, that would benefit the environment too. Or, why not give every home a rainwater tank, and/or a grey water treatment system. That would save water and take the pressure off our sewage industry.
    Or, I just heard that before we can sell (at least in Queensland) all houses have to have a hardwired smoke alarm in every bedroom. Our house has some already but needs more before we can sell. How about instead of making us pay for their safety initiatives, we get some support to do it? That would help the sparkies but also make us all safer.
    jan
    9th Jun 2020
    4:45pm
    At least the government is helping our kids build a house. Keeping my son in a job as well. You can not please everyone. Midland brick as 250, 000 bricks in the yard, been there for over a year.
    justjanet
    9th Jun 2020
    4:47pm
    Still waiting for update on WA involments I could do my unit up properly
    justjanet
    9th Jun 2020
    4:47pm
    Still waiting for update on WA involments I could do my unit up properly
    Fedup
    9th Jun 2020
    4:50pm
    It’s an election stunt from Scotty. “Let’s look like we’re giving away a lot of money, while making it nearly impossible for anyone to claim.” Paying half the cost for anyone who renovated their kitchen or bathroom would have given tradies more work and have been if benefit to more people, but that wasn’t actually the aim.

    For most houses under $1.5 million, a $150,000 reno would be over-capitalising. It completely rules out anyone living in a strata property who couldn’t possibly spend that much on a renovation. It will help new home builders, but they were probably going to build anyway and why should they get a $25,000 gift from taxpayers.
    Sundays
    9th Jun 2020
    6:37pm
    It’s also only available for such a limited time that the few who meet the criteria will be excluded anyway. Great for developers trying to sell houses which they will probably mark up.
    Fedup
    9th Jun 2020
    6:56pm
    That’s right. So it’s not giving work to tradies and it’s not stimulating the economy as the properties would have sold anyway. No one is going to buy or build a property just to get $25,000 if they weren’t intending to do it anyway, and it probably will push up prices.
    Misty
    9th Jun 2020
    6:18pm
    Why didn't they put it into building Public Housing, working with the States, that would create plenty of work for the building industry and benefit so many young and old people who are finding it difficult to get reasonably priced homes.
    Sundays
    9th Jun 2020
    6:33pm
    I agree Misty
    sainter
    9th Jun 2020
    7:34pm
    Totally agree Misty,but anything that makes any sense for ordinary Joe Blow,this Govt don't want to hear about it.....smoke and mirror
    sainter
    9th Jun 2020
    7:34pm
    Totally agree Misty,but anything that makes any sense for ordinary Joe Blow,this Govt don't want to hear about it.....smoke and mirror
    Misty
    9th Jun 2020
    9:43pm
    Just watched an interesting documentary on SBS about homelessness, 5 well known people of different sex and age sleeping rough for 2 nights, it has probably changed them forever, 8,000 people are sleeping rough every night in Australia, it was heart wrenching to listen to the stories and the effect those 2 nights and days had on these 5 people.

    Tomorrow they are paired, buddy style with 5 actual homeless people so it will be interesting to see how it all pans out. Why, oh why couldn't the government have put that money towards building accomodation for these people, that would create years of permanent secure work for the building industry.
    Incognito
    10th Jun 2020
    12:44am
    The reason they do not spend the money on social housing is because the Government does not care about anyone who is not profitable to them or making donations to their party.
    johnp
    10th Jun 2020
    9:45am
    I agree with most on this forum and incognito is right on the money with his comment !!
    aussiecarer
    9th Jun 2020
    7:01pm
    I think the grant has overlooked the fact that housing prices differ drastically from state to state. Spending $125K on a renovation to get a $25K grant might be feasible in Melbourne or Sydney, but spending $125K is overcapitalizing on your property if you live in most parts of WA. A much fairer way to stimulate the economy Australia wide would be to remove the GST from all building products for one year.
    Incognito
    10th Jun 2020
    12:47am
    Would have been good to help those renting still living in sub standard conditions and those pensioners who might need some things done to make their home safer and more comfortable, but we know that this Government is only interested in helping their mates and those who give big donations.
    Frankly
    10th Jun 2020
    6:19am
    A waste of tax payers money. Public housing would be a much better investment. These grants will just push house prices up again and benefit the big end of town.
    Incognito
    12th Jun 2020
    2:09am
    Exactly that is this Governments plan to help the big end of town always.
    Chris B T
    10th Jun 2020
    9:03am
    The "Grant" for New Build probably is on the money.
    Renovations not so, than other the "Wealthier" and that would make them Jump With Glee.
    Even at $50k beyond most for renovations at this time (most of the time for ordinary earners)
    There isn't even a Progressive amount to the $150k, this Indicates this is a Token/Chest Pumping Moment.
    The take up to be more limited than otherwise it could be, the time Frame Requirements Support This as well.
    For me $150k would be a New Build not Renovations.
    jan
    10th Jun 2020
    10:23am
    Hi Chris Visted a friend yesterday who bought a cheap run down house in an expensive area and is now going to renovate it with the 150.00 grant.
    Chris B T
    10th Jun 2020
    10:43am
    Don't you mean $25k Grant you need to spend At Least $125 on Renovations within a Time Frame.
    This Friend sounds like they Need Help with "Funds" not short of a $ just the Targeted People this $25k is for.
    jan
    10th Jun 2020
    10:55am
    Sorry yes I mean 25k My friend is not loaded with money that's why she bought a cheap house in need of a lot of renovating.
    Misty
    10th Jun 2020
    11:52am
    Jan, if your friend is not loaded with money, as you say, where will he/she get the $150,000 from to renovate?.
    patti
    10th Jun 2020
    9:38am
    How about putting some of that money into helping people with disabilities or mobility issues do modifications to their homes to make their lives easier??
    jan
    10th Jun 2020
    10:19am
    I think the government already helps in the modification of homes for the disabled etc. I know my friend is allocated money for gardening, cleaning etc An agent organises the distribution of the money.
    Tanker
    10th Jun 2020
    1:12pm
    Part of a re-election strategy methinks. get the tradies on-side as well as keeping those likely to vote LNP. Pollies are very good at spending taxpayers money to the pollies own benefit.


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