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BUDGET SUBMISSION
2021-22 Victorian State Budget priorities for the building and construction industry
Kevin Hoang Policy Adviser
Master Builders Victoria (MBV) has provided its pre-budget submission to the Victorian Government as part of the 2021-22 Victorian State Budget. Our previous pre-budget submission advocated for strong stimulus measures for the building and construction industry to address the COVID-19 induced economic downturn. As such, this year’s pre-budget submission provides recommendations that would help sustain Victoria’s economic recovery. The recommendations focus on reducing regulatory burden and duplication for businesses, reforming planning rules to promote good urban densification, and promoting jobs and training in the building and construction industry.
Minimising red tape in doing business and
addressing insurance gaps
It is important that the Victorian Government displays policy leadership by focusing on measures that would allow businesses in the building and construction industry to lead Victoria’s economic recovery. This includes minimising red tape for businesses by avoiding the introduction of regulation that mirrors existing state or federal regulation and addressing insurance gaps. The availability of Professional Indemnity insurance remains a problem for the industry; so we recommend the Victorian Government to direct the Victorian Managed Insurance Authority (VMIA) to provide capital for the underwriting of professional indemnity insurance as a temporary solution.
Extend scholarships for tradespeople to undertake training qualifications to teach in the non-TAFE sector
While funding was allocated in the previous budget towards attracting and supporting people to reskill as TAFE teachers, the current scholarships should be extended. An extension would allow teachers to also teach in the non-TAFE sector to ensure consistent quality training across the VET system. The focus should also be on providing scholarships to relevant tradespeople to ensure that VET programs are supported by solid industry knowledge.
Ensuring land availability for development
Although urban densification remains a key long-term policy goal, the current growing housing demand due to the strong economic recovery means an adequate supply of land is needed to meet this. Reports of land shortages in regional Victoria has placed greater urgency for the VPA to lead, develop and deliver a pipeline of state-led land releases across Victoria, with an initial focus on Wodonga, Geelong, Ballarat, and Bendigo.
Dollar for dollar matching of investment on energy-efficient home renovations
This will generate activity in the renovations market, instigate a reduction in energy usage and appeal to low-income households who so far have been less likely to take up existing programs.
Members have identified shortages of key building materials as a critical problem for the industry due to the growing housing demand. Active engagement with domestic and international supply chains is required. Grants for Australian businesses to diversify and produce critical building materials to strengthen Victoria’s supply chain and generate local jobs should also be considered.
Remove foreign surcharges on stamp duty and increase thresholds for the First Home Buyer stamp duty exemption and concession
High-density dwellings like apartments are important in accommodating a growing population. However, the latest industry forecasts have shown an expected reduction in the supply of high-density builds due to the COVID-19 induced reduction in foreign investment. A temporary reduction in the stamp duty on foreign investment would attract much-needed investment in this sector. In conjunction, measures should be implemented to increase homeownership for first home buyers. MBV recommends increasing the property value thresholds for the First Home Buyer stamp duty exemption and concession in line with the rise in median dwelling prices to aid in this.
Endorsement of the COVID-19 Contract Framework
MBV has proposed a solution for liquidated damages caused by delays from restrictions on building and construction work during 2020 because of COVID-19. The framework is known as the ‘COVID-19 Contract Framework’ and sets out a series of steps for parties to follow to reach outcomes that avoid adverse ramifications. The Victorian Government endorsing this framework would allow its broad use across the industry.
Incentives for urban densification and prioritising ‘as-of-right’ codification in the development of planning rules
Good urban densification plays a vital part in housing Victoria’s growing population. This means that high-density residential dwellings like apartments, secondary dwellings, and duplexes should be prioritised. Having councils set targets for supply and rewarding good performance for doing so is therefore required. Furthermore, there should be a more significant expansion of the use of ‘as-of-right’ codified planning to fast-track planning approvals for noncontentious development like secondary dwellings and subdivisions to support urban densification. The introduction of a pilot program for a secondary dwellings code is a positive step. It is hoped that the pilot program’s success means the expansion of the secondary dwellings code into all planning schemes for use.
There should be funding towards a stakeholder-driven consumer awareness campaign on careers across the building and construction industry. This campaign would showcase the opportunities that exist in the entire building and construction life cycle, including surveyors, engineers, architects, builders, and trades. It would also focus on areas of need, such as surveyors and engineers, and the gender imbalance in construction where female participation in the industry remains very low.
Introduce a funding program to assist builders with the requirements of state registration
With the soon to be introduced mandatory registration of trades, funding should be allocated for industry bodies to assist building practitioners in meeting registration requirements. These requirements do not just relate to the training course requirements for registration, but also the preparation of assessments with the Victorian Building Authority and preparation of work history.
Expand the Construction Skill Set funding program
Additional funding should be given to expand and extend the Construction Skill Set Pilot Program to ensure individuals are trained in in-demand areas and allow pathways for those students to achieve qualifications over time. The use of skill sets is a flexible approach towards addressing skill shortages in the industry, and because many of these units already form part of the complete Certificate IV and Diploma qualifications, few additional regulatory auditing or oversight processes are required. With Victoria’s economy recovering, MBV’s latest prebudget submission provides recommendations that would sustain the economic recovery for the long term. These recommendations would ensure ease of doing business, enabling building activity that produces liveable and sustainable cities, and improving vocational education and training for the industry. We look forward to the release of the 2021-2022 Victorian State Budget and policy outcomes that will achieve sustainability and viability for business, the economy, and our community.
