The building industry says it cannot afford the new levies.
The building industry says it cannot afford the new levies.

Builders hit with surprise new levies

THE building industry is predicting housing prices will soar under a shock government cash grab they say had left them blindsided.

The Palaszczuk Government announced plans late yesterday to pull in hundreds of millions of dollars by raising two construction levies to prop up builders' long service leave and fund suicide prevention.

But Master Builders deputy chief executive Paul Bidwell said the organisation had been caught totally unaware and the "struggling" industry could not afford the surprise new impost.

Paul Bidwell
Paul Bidwell

Industrial Relations Minister Grace Grace said the move would reintroduce a flat levy rate for all construction projects, reversing a range of Newman government levy "discounts" that saved the construction industry $91.3 million over the past four years.

Construction workers are able to keep long service leave entitlements when changing employers under a scheme funded by levying building projects worth more than $150,000.

Ms Grace said the previous government reduced the levy rate from 0.3 per cent to 0.25 per cent, excluded GST, introduced a tiered levy structure that applied discounted rates for projects over $1 billion and excluded projects worth more than $5 billion. She said those changes had "significantly compromised the financial viability of the scheme".

"The Government is proposing to restore the scheme to its former fairer structure, ensuring its longer-term financially sustainability," she said.

Mr Bidwell said companies didn't need another impediment to keeping on staff and homebuyers didn't need another reason not to build.

He said the news was yet another impost in a "never ending" cash grab on construction that already added 0.475 per cent to construction costs through levies.

"When you look at the cumulative effect over the years, it is significant," he said.

"And this is another that the builders of new houses will have to put up with.

"It certainly doesn't help, but how much it hinders remains to be seen."

The Government is also proposing a 0.005 per cent increase in a work health and safety levy to fund suicide prevention and mental health programs for the construction industry.

The Government is taking feedback on the changes, including on what the new flat rate should be.