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small business | August 19, 2021

Labor must step up to fix building product crisis

Huge challenges facing local builders have driven Member for Lowan Emma Kealy to call on the Andrews Labor Government to address the product shortages plaguing the construction industry.

In Parliament this month, Ms Kealy asked the Premier what his government would do to fix the critical shortage of timber and other building products that are putting thousands of Victorian businesses, jobs and projects at risk.

Ms Kealy has heard first-hand from builders about how diminishing supply and cost increases are putting them out of pocket and – in some cases – out of business.

“Labor has no plan to fix Victoria’s critical building supply issues, leaving the construction industry on the brink of collapse”, she said.

“Labor’s actions of winding down the sustainable timber industry in Victoria have reduced supply and driven up timber prices, resulting in an over-reliance on imported products.

“These supplies have then been delayed by local port strikes.

“The critical shortages are forcing manufacturers and suppliers to raise their prices, which then filter down to builders, their sub-contractors and their clients. These cost increases mean many projects simply become unfeasible.”

Ms Kealy said skyrocketing iron ore prices were impacting the cost of constructing steel-framed homes too.

“Steel prices are around 37 per cent higher than before the pandemic, while market rates for containerised freight are nearly 500 per cent higher,” she said.

“Prices for other building products, including certain types of rubber needed for manufacturing screws, have also increased.

“I was speaking to a builder who told me that the roof on one of his projects was costing him $7500 more than the amount quoted, because supplies had gone up so much. Because building quotes are binding, he has to wear this additional cost. Combined with other increases, he will now lose money on this project.

“If builders go broke, sub-contractors and suppliers can’t be paid, and clients are left with a massive mortgage and no completed dream home.

“The shortages and associated increased prices and delays are also forcing many families looking to build or renovate to rethink their plans, further compounding the challenges the building industry is facing.

“The Andrews Labor Government is guilty of winding back Victoria’s sustainable timber industry, has turned its back on Victoria’s manufacturing industry, and has no plan to address the critical supply challenges faced by the construction industry.”