POLICY
COVID-19 Building and Construction Industry Resource Summit Megan Peacock Director Policy
O
ver the past six months, Master Builders Victoria (MBV) has been working tirelessly on issues facing our industry, including supply chain shortages. At the request of MBV, the Victorian Government has asked Commissioner for Better Regulation and Red Tape Commissioner, Anna Cronin, to investigate the issue of building and construction material shortages. The Commissioner will deliver a report on the state of supply shortages in Victoria to the government by November 2021. As well as this, MBV has hosted working groups, talked to ministers and shadow ministers, and our counterparts in other states about supply shortages. Just recently, MBV hosted the Victorian Treasurer, Tim Pallas, in a special members summit to update the industry on the current situation of key supply shortages impacting the building and construction sector. The Treasurer was joined in the online discussion by Ms Cronin, along with industry representatives, including builders, retailers, and suppliers. MBV CEO Rebecca Casson told the audience that our industry had worked tirelessly to remain COVIDSafe and open for many months when many other sectors had closed. MBV understands the impact of COVID-19 lockdowns on our members, and we know many are small business owners struggling to survive the crippling financial impacts of not being allowed to work. Of concern across the building and construction industry is the risk of increased insolvencies due to supply shortages.
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MBV is seeing builders whose businesses are stalling, waiting on supplies, and progress payments unable to be paid. However, builders need to order supplies because of the long wait times, which leads to an increase in liabilities and a greater risk of insolvency. MBV is concerned that building and construction insolvencies could continue to rise as Victoria accounted for nearly 40 per cent of all building and construction insolvencies across Australia this year. In the first four months of 2021, there were 145 building and construction insolvencies in Victoria – up 34.3 per cent on the same time last year. This was the highest January to April total since 2014. The building and construction industry’s share of all Victorian insolvencies was also at a record high (26.3 per cent over the 12 months to April 2021). Before 2019, the volume of building and construction insolvencies in Victoria had been trending downward. MBV members are reporting the following: • Material shortages – for example: » Wait times for mesh and pods
have gone from two weeks to four weeks and now to six weeks. » Wait times for frame and trusses
have gone from four weeks to eight weeks, and now 14 – 16 weeks (about 3-4 months). » Windows are out to eight weeks
when we would normally have them in four weeks. » Bricks are starting to take up to
four weeks longer than normal. • Timber suppliers across Victoria
responding to requests are unsure when in-demand products will become available. • The shortage of timber is already
significantly impacting businesses
and project delivery. • There are trade shortages due to
availability. • There is a shortage of structural steel. • There is a shortage of Colorbond roof
sheeting. • Unable to move from timber to
steel frames as plans need to be reengineered, and carpenters often don’t have tools or skills to work with steel. These coupled with massive price increases have combined to deliver major project time and budget blowouts. During her presentation to members, Ms Cronin welcomed the session as she finalised her recommendations. Better Regulation work has had a particular focus on timber shortages as this is of most concern at this time, including plantations, freight and import issues. Ms Cronin is also looking at the builderconsumer relationships in terms of the contractual arrangements under the Domestic Building Contracts Act. She said the latest figures showed the number of building permits issued in Victoria increased by 11 per cent to June 2021 – an additional 12,000 building permits. This increase in building may ease with the opening of borders but is predicted to continue to impact the supply chain well into 2022. Her report will focus on short-, mediumand long-term solutions to the supply shortages issue. Other speakers included Duncan Bryce, Head of Builders Solutions, Bunnings Trade; Rhett Simonds, CEO of Simonds Consolidated; and Mark Little, President, Master Builders Victoria, and owner of Little Constructions based in Geelong. Once Ms Cronin’s report is released, we will share its findings, and MBV will continue to advocate on the supply shortages issues for our members.
Volume 76 Issue 04
