“If the government doesn’t extend the deadlines, the industry is going to break,” Mr Helmers told The Australian Financial Review on Tuesday…

“We have three years’ worth of work in the pipeline at current levels,” Mr Helmers said. “I’ve got to do two years in one.”

Extending the deadline for completing HomeBuilder works to 12 months makes sense.

The HIA recently predicted a record-breaking 127,140 detached housing starts this year followed by a collapse to around 91,000 starts by 2023 as demand crashes.

It, therefore, makes sense to spread the construction pipeline over a longer period, thereby mitigating the boom-bust cycle.

As it currently stands, the construction industry is facing an acute shortage of builders and materials, which is resulting in cost escalation. But following that, the industry confronts a collapse in activity and mass unemployment once the HomeBuilder pipeline passes.

The government should instead seek to smooth the construction cycle. Extending the HomeBuilder deadline achieves this without adding extra costs to taxpayers.

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Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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