Newly-obtained reports suggest the Morrison government’s COVID-era HomeBuilder scheme benefited high income earners and select builders.

HomeBuilder, pitched by the Morrison government as a central part of Australia’s COVID-19 response, has come under fire as multiple secret reports reveal its detrimental impact on the construction sector and inadequate governance.

The scheme, which provided grants of up to $25,000 to homeowners for building or renovating their properties, was initially projected to cost $688 million but ended up exceeding $2.3 billion.

The scathing reports, obtained by the ABC through Freedom of Information requests, highlight several flaws in HomeBuilder.

The eligibility criteria were criticised for favouring middle-to-high-income earners, with only a select group of builders benefiting from the funding. The scheme's requirements were deemed unfit for purpose, and complaints could only be submitted via sporadically monitored email.

Furthermore, the reports underscored the scheme's contribution to the “overheating” of the construction sector, leading to increased costs for building and renovating homes.

The KPMG report specifically states that HomeBuilder exacerbated labour, material, and land supply constraints, resulting in financial struggles and even liquidation for some builders.

State and territory governments were blindsided by the announcement of HomeBuilder, despite being responsible for administering the program.

They lacked input in its design and raised concerns that were not adequately addressed by the Treasury. The lack of transparency and inconsistent administration across different locations were recurrent issues, as highlighted by the Commonwealth Ombudsman's investigation.

Despite the criticism, a PwC Australia report in late 2020 allegedly gave HomeBuilder a positive evaluation. That report was not itself included in the FOI documents, but was referred to in the KPMG report.

The released documents indicate a need for improved governance, risk management, and record-keeping for such large-scale programs.

In response to ongoing challenges faced by applicants due to supply constraints and industry delays, the Albanese government has extended the deadline for submitting supporting documentation to June 30, 2025. This extension aims to support those who made financial commitments based on the expectation of receiving the HomeBuilder grant.