While the property industry has welcomed the government's HomeBuilder package, it has been widely criticised by others, with economists dismissing it as poor public policy.
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The federal government's earlier stimulus announcements were largely greeted positively, but the $670 million HomeBuilder has had the opposite reception.
Deloitte Access Economics partner Nicki Hurtley said it was hard to know what the $25,000 grants for home renovations and new builds would achieve, especially given the tight timeframe. Contracts must be signed by the end of the year.
Renovations must be worth more than $150,000, a measure designed to avoid fly-by-night offers from rogue builders. But Ms Hurtley said it was highly unlikely such substantial projects could be organised quickly enough, given the need for planning approvals.
"All I can see that this is going to do is give a handout to people who probably would have gone ahead with this anyway," she said. "If people were baulking about going ahead because they were worried about the economy or job security, it's probably not a good idea to encourage them to do so.
"And quite frankly giving handouts to people, who already own their homes when there are so many who can't get their foot in the door would seem to me to be not very wise policy."
For new buildings, projects must cost no more than $750,000 including land, a restriction Ms Hurtley said would effectively rule out many homes in the big cities.
And for someone who was spending that kind of money on a new home, $25,000 was unlikely to tip the balance.
Ms Hurtley said the grants for new builds wouldn't prevent the construction downturn, but might "soften it at the edges".
A much better way to help the construction industry would have been to fund any number of necessary projects, such as removing asbestos,replacing combustible cladding, maintaining public housing, building new public and social housing, building homeless and crisis shelters and refuges for people escaping family violence.
"The cynic in me would say they're under a lot of pressure from the sector to do something, and quite rightly. It's actually a cornerstone of the Australian economy and one of the largest sectors," she said.
"But that doesn't mean that it makes good policy and potentially it's the government saying here, we're throwing you a bone without necessarily having to spend as much money."
The Grattan Institute's Brendan Coates said construction had been hit hard, having lost 10 per cent of its workforce since March, with legitimate concerns about work falling off in the second half of the year, but the renovation grants were hard to understand.
They appeared to have been devised in a way to avoid a "pink batts scenario" with small renovations and instead ensure home owners had "skin in the game" but that meant they were targeted at people who were probably going to do a renovation anyway, given the Christmas deadline.
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"In trying to prevent some of the other problems to arise they've narrowed the scheme to such a point that it becomes almost irrelevant," he said.
Well-off self-funded retirees were one group which might access the grant, given they could spend money on renovations without losing the pension and given they could qualify for the grant even if they were very well-off since withdrawals from superannuation wouldn't count as income. The scheme is limited to individuals earning less than $125,000 and couples earning less than $200,000.
Prime Minister Scott Morrison said about 20,000 grants were expected to go to new builds and 7000 grants to renovations.
Mr Coates said the new build grants were better than the renovation grants because at least some of the money would encourage people to buy homes who might not otherwise have done so.
"The good news of the scheme is they haven't spent a lot of money. There is certainly still a lot of fiscal space if they do want to do another and more meaningful stimulus for the construction sector they can."
Mr Morrison said the scheme had been designed to ensure integrity.
"You don't do it at the small scale renos," he said. "We weren't going to have people go knocking on people's doors saying, let me come out and rip your kitchen out, and you'll get some government money. That's what happened when Labor did these schemes."