Paul Bidwell, Deputy CEO of Master Builders Queensland, has made some extraordinary comments to the Courier-Mail, calling for the federal government to stimulate the construction industry through a new Building the Education Revolution, which was a Rudd Government stimulus measure. The Courier-Mail reports:
Mr Bidwell argues a massive government spending program, similar to Kevin Rudd’s Building the Education Revolution scheme during the 2007-2010 Global Financial Crisis, was key to stimulating economic growth.
Under the scheme $16.2 billion was spent on infrastructure for schools.
Mr Bidwell [said] the scheme would help offset low residential building approvals and would again stimulate the economy.
BER was undoubtedly good for the building industry, although its benefits to taxpayers were less clear (see Lessons from the BER program), with inflated BER construction costs and a program duration which extended well past the period of risk for the Australian economy.
While I wouldn’t support Paul Bidwell’s call for a new BER, I understand where he’s coming from. As I reported last week, in my June quarter National Accounts post, dwelling, non-dwelling, and engineering capital expenditure have been declining. Regarding leading indicators, residential building approvals are well down on where they were 2-3 years ago (see chart below). Non-residential approvals have had a bit of a boost recently, but it remains to be seen whether the upward trend in non-residential approvals will continue. Overall, I think Bidwell is rightly concerned about the outlook for the building industry.