ACT Chief Minister Katy Gallagher announced a stimulus package for the ACT building and construction industry today, which will cost the Territory about $13 million over 3 years.

The executive director of the Master Builders Association of the ACT, John Miller, has welcomed the stimulus package and described it as “a shot in the arm for the building and construction industry” that would inject hundreds of millions of dollars into the ACT economy.

“The Chief Minister and Minister for Economic Development have recognised the dangers facing builders who are fast running out of work and the escalating costs of land when supply continues to fall well short of demand,” Mr Miller said.

“Importantly, the many people in the community looking to enter the housing market, particularly at an affordable level, will have their dreams realised sooner rather than later.”

Canberra Business Council chief Chris Faulks also commended the package, which he said would shore up the local economy in a time of uncertainty.

“The ACT faces a constant roller-coaster in terms of its economy because it relies so heavily on two main industries – the building industry and the public sector,” Mr Faulks said in a statement.

“When these sectors are thriving, the economy prospers; but if one or both hit hard times, it is felt heavily in Canberra.”

The package has four elements: releasing at least four civil contracts for around $150 million worth of estate works in Moncrieff, changes to lease variation charges (LVC), a reduction in fees for extensions of time (EOT) to commence and complete developments, and new legislation to facilitate major projects across the ACT.

At least four civil works contracts at Moncrieff originally scheduled over a 3-4 year period will be brought forward and undertaken concurrently, which the Chief Minister says will drive economic activity and boost housing supply.

“The release of the contracts at Moncrieff will also contribute towards meeting the Government’s target of 20 per cent affordable dwellings in greenfield development sites in line with our commitments in the Affordable Housing Action Plan,” Ms Gallagher said.

The Chief Minister confirmed the Government would also bring forward legislation in the next sitting week to smooth the way ahead for certain priority projects.

Changes to lease variation charges apply until March 6, 2016, and see all codified LVC fee and remissions schedules frozen at the current rate and remission level for the next 2 years. For non-codified variations, the remission rate will be increased from 25 to 50 per cent for the next 2 years and a further 25 per cent remission is available for developers who incorporate “high standards of sustainable design and adaptable housing” into their projects.

From 1 April 2014, EOT fees will only be applied on completion breaches, where they extend longer than four years, and will be billed annually at a rate equal to the general rates bill, rather than five times general rates. Fees for EOT debts that accrued for the period July 1, 2012 to March 31, 2014 will be waived and for debts accruing from April 1, 2014, the EOT will also be equal to the general rates bill.

For eligible people and businesses who have paid EOT fees during the waiver period, a refund equal to the component of their fee that accrued after 1 July 2012 will be available on application. This ensures that those who have and have not paid the fees during the period are treated equally under the reforms.

The Chief Minister thanked their Masters Builders Association, the Canberra Business Council, the Property Council of Australia, the Housing Industry Association and the ACT Chamber of Commerce and Industry for working closely with the Government on the stimulus package.