Labor’s victory provides opportunities for Australia’s construction industry
Author : john robert | Published On : 22 Sep 2022
The leader of the Australian Labor Party (Labor), Anthony Albanese, was sworn in as Australia's 31st Prime Minister on the 23rd of May 2022, ending nine years of Liberal-National coalition government. The Labor Party remains on track to get a majority government, having gotten 75 of the 76 seats required, with three seats yet to declare. While another Labor federal budget is not normal until October of this year, the election promises made during Labor's campaign will provide significant opportunities for the Australian construction industry during their residency.
Measures to tackle climate change played a prominent job in Labor's election campaign. Central to Labor's climate strategy is its 'Powering Australia Plan' that outlines various measures to decrease Australia's carbon emissions to 43% under 2025 levels, and increase the share of renewable energy in the National Electricity Market to 82% by 2030. To achieve these targets, a total of A$76 billion ($56.9 billion) of investments will be required, of which A$24 billion ($18 billion) will be public investment. Significant investments as part of Powering Australia include the A$20 billion ($15 billion) Rewiring the Nation policy, which aims to accelerate the construction of high-voltage infrastructure, allowing Australia's electricity grid to accommodate the significant planned increase in large-scale renewable energy. Additional investments include A$3 billion ($2.2 billion) to support renewables manufacturing and the organization of low-emissions technologies, A$100 million ($74.9 million) for 85 solar banks, and A$200 million ($149.7 million) for the installation of 400 community batteries.
The Labor government's investment in transport infrastructure has yet to be completely outlined, however it is normal to maintain much of the significant investment found in the sector lately. Labor has committed to providing A$500 million ($374.4 million) to begin corridor acquisition, planning, and early works on a fast rail link among Sydney and Newcastle. The proposed rail line will be capable of accommodating paces of up to, and more than, 250 km/h, cutting excursion times from 150 minutes to 45 minutes. The line is supposed to be the first phase in an eventual high-speed rail line among Sydney and Brisbane. Labor have also promised A$2.2 billion ($1.6 billion) for the $21.4 billion SRL East section of the Suburban Rail Circle project in Melbourne. Through its National Rail Manufacturing Plan, a greater proportion of the rolling stock that will be used on these lines will be manufactured domestically, ensuring that each dollar of funding spent on rail tasks will support Australia's domestic rail industry.
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Labor also pledged significant support for the residential sector during their election campaign, including a Help to Purchase scheme and a considerable increase in the construction of social and affordable housing. Through the A$10 billion ($7.5 billion) Housing Australia Future Asset (HAFF), Labor will subsidize the construction of 30,000 new social and affordable housing properties over the following five years. Investment gets back from the HAFF will be transferred to The National Housing Finance and Investment Corporation to pay for social and affordable housing projects. These profits will subsidize the construction of 20,000 social housing properties and 10,000 affordable homes for frontline workers.
The Help to Purchase scheme will be available to 10,000 eligible Australians each financial year, and will provide an equity contribution up to a maximum of 40% of the purchase price of another home, and up to a maximum of 30% of the purchase price of an existing property.
Labor election pledges that may support activity in the mining sector include an A$1 billion ($748.7 million) investment through loans, equity, and guarantees for businesses in assets value-adding and mining science. The Value-adding in Assets Asset will expand mining science technology capabilities and guarantee a greater share of the raw materials extracted in Australia are domestically handled. Labor does, however, intend to tighten the existing Safeguard Mechanism, which regulates permitted emissions in designated carbon-intensive industries.
The government has proposed a gradual lowering of emissions baselines, requiring industries that surpass these baselines to offset through the purchase of carbon credit units. Given the mining sector is responsible for a significant proportion of Australia's GHG emissions, this may marginally impact construction demand in the sector. PM Albanese has, however, been relatively supportive of the continued improvement of coal mines and dismissed a call to phase out coal use. With Labor likely to get a majority government, the influence of the more fossil fuel-averse Teal independents and Greens will be decreased, and new mining investments are likely to remain robust.