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The state’s Treasurer has announced that Queensland will be re-examining applications that were rejected under the HomeBuilder scheme.
HomeBuilder, which ran from June 2020 to March 2021, was a program introduced by the Morrison government that provided $25,000 grants to owner-occupiers who were either buying or building a new home or were renovating an existing home.
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Across Australia, there were 121,363 applications for the program, which comprised 99,253 new homes and 22,110 substantial renovations.
However, speaking to the Legislative Assembly of Queensland yesterday (11 May), state Treasurer Cameron Dick revealed that the measures introduced with the initiative resulted in some applicants who should have been approved were, in fact, rejected.
“Members will be aware that this federal government program is administered by the states,” Mr Dick said.
“Because he did not work closely with the states, Scott Morrison ended up introducing a definition of ‘new home’ that was contrary to the longstanding and well-understood arrangements that apply for first home owners grants.”
Mr Dick added that this approach, along with “restrictive guidance from the federal government”, resulted in the Queensland Revenue Office being required to “refuse some applications on the basis that work had commenced prior to the start of the program”.
According to Mr Dick, this impacted roughly 200 of the state’s 29,000 applicants.
However, according to the Queensland Treasurer, the Commonwealth has since relaxed its guidance, which will subsequently allow “the bulk of these rejected applications to be approved”.
In a statement to The Adviser, a spokesperson for the Queensland Revenue Office confirmed that this relaxation came after the Commonwealth was prompted by the Queensland government.
“That eligibility will also apply to other relevant applicants who may have applications pending,” Mr Dick noted.
“The Queensland Revenue Office will be writing to those applicants from this week to inform them that their cases are being reviewed.”
The Adviser understands that the Queensland Revenue Office will be responsible for administering the HomeBuilder scheme across the state.
This development marks a shortfall in the Morrison government initiative. However, this is not the first instance that the program has been questioned over its long-term impact.
In a report released last month, the Australian Housing and Urban Research Institute (AHURI) noted that while the scheme did have positives, it also presented a range of “unanticipated and unforeseen consequences”, resulting from demand-side subsidies, low-interest rates and flexible lending conditions.
“The effects of bring-forward demand, coupled with labour and material shortages, have contributed to price escalation, while creating the conditions for a sudden decline in new housing construction as the incentives wind down,” the report stated.
“While the short-term impacts of home ownership interventions in relation to COVID-19 have been positive, there may be negative medium-term implications for the construction industry.”
Other criticisms noted in AHURI’s findings included how the scheme partly brought forward demand from buyers who would have otherwise built later, and how its time frames placed significant pressure on builders – the latter seeing a wave of supply shortages and spiked building costs.
[Related: HomeBuilder has mixed consequences: AHURI]
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