Federal & State Budgets – What it means for Victoria’s Construction Industry
Author: Phil Underdown
Published date: 2022/05
On 3rd May 2022 the Victorian Government pledged an additional $97 billion in “planning, building, operating and maintaining transport assets, including new trains, trams, tunnels and roads.” This is in addition to the Federal Government committing an additional $17.9 billion to infrastructure projects across the country. Current Victorian projects of note include the Westgate Tunnel, North-East Link, Metro Tunnel, Suburban Rail Loop, and The Level Crossing Removal Program. The unified effort to upgrade transport links nationwide will create numerous new jobs and opportunities for businesses in the post-pandemic era.
Although this is great news, it does not come without potential pitfalls, most notably a shortage of skilled workers and a scarcity of construction materials. The effect of COVID-19 on global labour markets and supply chains is becoming ever increasingly clear. By speaking with several of our clients, they’re having to adapt in real time and work with the resources that they already have. That’s why, now more than ever it’s important to keep staff happy and spend time as well as money on upskilling and training your current workforce.
In regional Victoria the Government are also spending big on Infrastructure. The Regional Rail Revival program and ongoing regional road improvements are aiming to better connect communities across the state. Investment in this sector state-wide is also creating new jobs. In Victoria 280,000 jobs have been created since September 2020. This has resulted in regional Victoria having the lowest unemployment rate in the nation.
There are numerous opportunities for people of all abilities and backgrounds to work on major projects across the State. The Federal Government have invested an additional $2.8 billion into training and developing Australians through apprenticeship schemes – a hopeful hedge against the issues in the labour market. To help support this scheme there are wage subsidies for any employer looking to go down this route. With all major projects now having multiple quotas for categories such as apprenticeships, cadetships, ex-automotive workers, people from entrenched postcodes, disadvantaged youths and more, there are now numerous opportunities for people of all abilities and backgrounds to obtain meaningful, long-term employment.
With regards to the residential sector, the Victorian housing market is showing no signs of slowing down. From speaking to our clients who operate in this industry, it has never been busier! To combat rapidly increasing house prices the Government has pledged additional support to first home buyers in the shape of the First Home Guarantee, Family Home Guarantee, and a newly announced Regional Home Guarantee. In the most recent Federal budget, an additional 50,000 places have been made available for these schemes alone!
With ever increasing inflation figures and the cost-of-living crisis, Federal and State Governments are now offering tax cuts and incentives to small businesses and individuals to help alleviate some of the pressure. Eligible businesses will be able to claim a bonus 20 per cent deduction for the cost of expenses and depreciating assets, up to $100,000 of expenditure per year. This is on top of a bonus 20 per cent deduction for the cost of external training courses delivered to employees in Australia or online, by providers registered in Australia.
In summary economic recovery is at the forefront of both the Federal and State budgets. The continued investment in construction will create numerous jobs for people of all backgrounds and abilities. Although this will come with some challenges, it is a great time for businesses and individuals to capitalise on the many opportunities that will arise.
This blog was written by our Principle Civil Trades Consultant, Phil Underdown. You can connect with him on LinkedIn here.
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