Master Builders Australia has come out with a scathing report on the perceived inadequacies of the Budget announced by Treasurer Wayne Swan saying that it lacks the "business orientated productivity and tax reforms required to boost flagging business confidence and growth".

Wilhelm Harnisch, chief executive officer of Master Builders Australia said the Budget puts even more pressure on the Reserve Bank to do the heavy lifting in terms of stimulating consumer confidence and reviving the building and construction industry.

"The new $24 billion investment for urban road and rail infrastructure is welcome but its impact is many years away.

"There are no other measures in the Budget which will impact positively on the building construction industry. Therefore, tonight's Budget is disappointing for an industry suffering very difficult conditions.

"The building and construction industry was looking for a clear strategy to improve productivity, reform the tax system and help restore business and consumer confidence. The best way for the Government to address its revenue shortfalls is to ensure businesses are healthy and profitable.

"To achieve the planned surplus in three years' time the Government is overly reliant on projections of solid economic growth, not a foregone conclusion given the economic headwinds.

"In the current challenging economic environment, Master Builders believes the priority for fiscal policy should have been to complement monetary policy by adopting a pro-business strategy.

"The Treasurer and Reserve Bank Governor have consistently stated they are looking to the building industry to fill the gap created by the slowdown of activity in the resources sector. However, there is nothing in tonight's budget that will help achieve this objective," Harnisch said

HIA last week launched its Federal Election 2013 policy platform - Housing Australians. It outlines HIA's 50 policy actions to provide a blueprint for federal government to address the growing housing affordability challenge facing Australia and to ensure a sustainable residential construction recovery commensurate with the needs of the Australian economy and its growing population.

"Housing Australians should be a Federal Government priority. While the budget retains the existing NRAS program and includes a modest measure to assist seniors in downsizing their homes, housing has otherwise been ignored," said HIA's Chief Economist, Dr Harley Dale.

"It is disappointing that there are no measures to address the excessive regulatory and taxation environment faced by Australia's residential building industry," said Harley Dale. "Such reform and investment measures would generate a healthy economic dividend to the entire economy, including a substantial boost to government revenue."

"The boost to infrastructure investment is welcome, however the measures fail to address necessary infrastructure funding to support new residential development and boost new housing supply," said Harley Dale.

Extending the requirement to make monthly pay-as-you-go (PAYG) income tax instalments to include smaller entities, including trusts, superannuation funds, sole traders and large investors will add an immediate cost impost on business. This measure is expected to increase tax revenues by $1.4 billion over the forward estimates period.

"On a positive note, the retention of government's investment in skills and training, and the allocation of funding for an Alternative Pathways Program and the Skills Connect Fund is welcome news," said Harley Dale.

"For an industry that is crucial to rebalancing Australia's economic growth, a lack of focus on residential building in tonight's budget is a glaring omission," Harley Dale concluded.

Architecture & Design Team

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