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Dadto2

$25'000 stimulus package

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Dadto2

So this is a scheme to help low to middle income earners, being given $25'000 to be put towards big projects such as remodelling and home extensions. To qualify for the $25'000 you must earn under $175'000 per year, have $75'000 in cash that you are willing to contribute towards a minimum spend of $100'000 on renovations. I'm going to go out on a limb here and speculate the number of low to middle income earners, in Australia, that have $75k in cash that they are willing to spend on renovating their house is precisely 0. Am I missing something? It just sounds completely whack.

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Ellie bean

It really does. I’d rather see that money spent giving Jobkeeper to people in the arts...

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MadMarchMasterchef

Do you have a link please?

We were planning to move to a bigger house before CV hit but Id consider borrowing the money to renovate instead.

 

I agree it seems like money that could be better spent elsewhere. presumably the idea is to stimulate the building industry but I think it could be better used building community facilities.

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Cimbom

Lmao what a stupid proposal, especially in the current economic situation. Just when you think the government couldn’t be further out of touch, they just go and outdo themselves

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MoreCoffeePlease

this sounded great until the having $75000 cash!

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Green Sage
Posted (edited)

Looks like it hasn’t actually been announced yet, so we don’t know the full details.

 

But yeah, expecting even a middle income family to have access to $75,000 cash for a renovation is a bit ridiculous. Maybe they will borrow the money though, if they have the equity, to do a renovation. It will be people who were planning to do something major anyway. It doesn’t sound like something that would cause a mass change of behaviour and spending. People will just upgrade their benches that they were going to get anyway, or pocket the difference, treat it as a 20% discount on what they had planned anyway.

 

But I wouldn’t be starting a major Reno any time soon. Cause it could get halfway done and another outbreak occurs and you’re living in a half finished house for 3 months while we are all in isolation again. No thanks!

Edited by ~LemonMyrtle~
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Bethlehem Babe

Sounds perfect for those that structure their affairs to have low income, and low expenses, but have cash available.

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Green Sage

Sounds perfect for those that structure their affairs to have low income, and low expenses, but have cash available.

 

I was thinking it might help some semi retired or retired people afford to do some renovations. But they would still have had them planned anyway. Cause $75 or $80k (the details are sketchy) is still a crap load of money to spend.

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born.a.girl

The construction industry is predicted to crash within about six months. They're busy now because all of the projects & houses they're working on were finalised before Covid.

 

 

I haven't spent much time thinking about it yet - will be interested to hear what reputable experts have to say.

 

Even if jobseeker reduces to its previous levels (surely it can't) that's the cost of supporting someone for two years.

 

 

I wouldn't want to see a repeat of what happened during the early 90s recession - our last recession.

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Dustyblue
Posted (edited)

Perhaps people who lost their homes in the bushfires and were under-insured could make use of it. Otherwise I can't think of many people who can really utilize it.

Edited by Dustyblue
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Green Sage

We have some Reno’s that need doing. I could easily get it up to $100k worth. And if we were eligible, it would probably make me do them. It would definitely have that change of mind factor, I would even risk locking it in within the next 6 months to get the extra cash. But, sounds like we wouldn’t be eligible. So we won’t be doing any of it, or, rather, we will instead chip away at it over the next few years, when the timing is right.

 

Maybe they need to open it up to everyone. If they truly want money pumped into construction and trades in the short term.

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born.a.girl

I know a couple who might be able to use it. Bought about 7 - 8 years ago, kinda cheapest house in a suburb a fair way out. Two bedrooms, but the second so small the two kids have to have bunk beds. No family room.

 

 

They've focused all of their attention on getting the mortgage paid off while interest rates are low.

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CallMeFeral

I know a couple who might be able to use it. Bought about 7 - 8 years ago, kinda cheapest house in a suburb a fair way out. Two bedrooms, but the second so small the two kids have to have bunk beds. No family room.

 

 

They've focused all of their attention on getting the mortgage paid off while interest rates are low.

 

That sums us up. We need to rebuild because 3 kids in a 2br house is no joke, but we were thinking of holding off because the economy is so uncertain and my job has disappeared. This would be an incentive not to hold it off.

 

In the end, this is a grant to stimulate the housing industry, not to give gifts to a certain income bracket, so debate whether people in that bracket deserve a handout is kind of missing the point. They are incentivising people who would be renovating at some point anyway (hence they have the cash) to bring it forward to this uncertain economic time rather than bunkering down and saving their cash while things are risky. The 'grant' is effectively to the housing industry, they are putting in a quarter of it and the other 3/4 is coming from the pockets of people who can afford it.

 

I think the old method of covering off building industry slumps during an economic downturn was for the government to do the building, it would be the time to start building infrastructure, trains, roads, etc. invest in the future and all that. But of course that would be a pretty un-liberal thing to do, so this must be the alternative they came up with.

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MadMarchMasterchef

 

 

But I wouldn’t be starting a major Reno any time soon. Cause it could get halfway done and another outbreak occurs and you’re living in a half finished house for 3 months while we are all in isolation again. No thanks!

 

Good point. Construction work didn't stop during the restrictions so I didn't think of that.

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born.a.girl

That sums us up. We need to rebuild because 3 kids in a 2br house is no joke, but we were thinking of holding off because the economy is so uncertain and my job has disappeared. This would be an incentive not to hold it off.

 

In the end, this is a grant to stimulate the housing industry, not to give gifts to a certain income bracket, so debate whether people in that bracket deserve a handout is kind of missing the point. They are incentivising people who would be renovating at some point anyway (hence they have the cash) to bring it forward to this uncertain economic time rather than bunkering down and saving their cash while things are risky. The 'grant' is effectively to the housing industry, they are putting in a quarter of it and the other 3/4 is coming from the pockets of people who can afford it.

 

 

 

 

Exactly this - times are uncertain to say the least.

 

This is the nudge for those who might otherwise put it off.

 

People DO stop spending when times are uncertain. Some of them would be construction workers themselves, who are looking at a couple of years before the industry picks up.

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MadMarchMasterchef

. But I would not accept that money. There are better ways to get a construction boom happening than putting money in the hands of people who can already afford a house. (And if I we did accept the money, then I'd make big donation to getup or someone else trying to bring this awful government down.)

 

I think its a bad use of taxpayer cash but Id still accept it if the numbers stack up for us. Otherwise DS might be sleeping in my bedroom until he's 15 :huh:

 

Great idea about making a donation, I would certainly donate to a charity that works with homeless or similar.

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wallofdodo

I do believe that giving money to fund building projects is a great idea, if the building industry goes under then we are in for really hard times.

 

That said I am in the boat of being interested, but I don't have the 75,000.

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born.a.girl

What we need is a huge spend on social housing.

 

What better time to do it?

 

Given the jobkeeper funds were expected to be spent, we know the deficit can handle some more.

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solongandthanksfor

so borrow the 75k, just like people borrowing the house deposits to get the home loan in the first place.

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laridae

I was hoping the values would be lower. I need a kitchen and bathroom. But 100k spend would be totally overcapitalising I think. That's a fairly major renovation.

I also don't have 75k to put towards it.

Guessing they want people building new rooms or something.

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Bethlehem Babe

You could put it towards community infrastructure. Library, schools, uni, TAFE, hospitals, community halls, sports grounds for community use, etc. also stimulating the economy but benefit the community.

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MsLaurie

We were planning an $80-$120k ish reno in the next 2-3 years- the house is on a steep hill and we need to restump and plan to build a rumpus, extra bedroom, possibly a small bathroom underneath. We have been over-paying the mortgage to give us redraw money to fund this so probably could do the matching funds... but we’re not “shovel ready”, no plans or council approval or anything so I doubt we’d be good to go in time. Suppose it would depend on timelines?

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PuddingPlease

The proposal is pretty outrageous because it involves giving public money to individuals so that they can increase the value of their own assets. There are 1001 ways to boost the construction industry, this just stinks of pork barrelling to me.

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CrankyM

The proposal is pretty outrageous because it involves giving public money to individuals so that they can increase the value of their own assets. There are 1001 ways to boost the construction industry, this just stinks of pork barrelling to me.

 

This pretty much sums it up for me. If you want to get construction going then bump up the social housing. There are huge lists for people trying to access it and no where near enough places. Some social housing is frankly appalling and should be condemned and rebuilt/renovated. It's public tax funded money, spend it on actual projects that provide support for people, not give it to individuals. Heck chuck it at some of the schools, our local high school has at least 2 blocks of buildings that need serious renovations and expansion. I know a lot of schools that are similar.

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Dadto2

I was hoping the values would be lower. I need a kitchen and bathroom. But 100k spend would be totally overcapitalising I think. That's a fairly major renovation.

I also don't have 75k to put towards it.

Guessing they want people building new rooms or something.

 

I think they are aiming it at people wanting to extend their house, large singular projects, so I don't even think people could use it for multiple renovation projects e.g kitchen and bathroom. Just one big renovation. I just don't think there will be many people that qualify and of those that do, how many will be interested.

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