Construction Industry

Ms STINSON (Badcoe) (14:58): My question is to the Treasurer. Can the Treasurer update the house on the escalation of construction costs and how governments have managed them?

The Hon. S.C. MULLIGHAN (Lee—Treasurer) (14:58): I thank the member for Badcoe for her question. We all understand the impacts of inflation, especially now that it is running so high not only across the globe but here in Australia—

Mr Pederick interjecting:

The SPEAKER: Member for Hammond!

The Hon. S.C. MULLIGHAN: —and particularly here in South Australia. Each year, an inflationary environment means the costs of goods and services continue to increase. It is affecting households, businesses—

Mr Whetstone interjecting:

The SPEAKER: Member for Chaffey!

The Hon. S.C. MULLIGHAN: —and, of course, the commercial construction industry. It is the commercial construction industry that in many cases has experienced inflation most acutely, particularly in the last 18 months and, it's true to say, over the last three years. The statistics—as they are published on the ABS website—show that the increasing costs of components required for commercial construction have soared in the last three years: electrical equipment up 32.4 per cent; timber, board and joinery up 33.9 per cent; steel products up 28.5 per  cent; cement products up 20.6 per cent; and plumbing products up 19.5 per cent.

Yesterday, I was stunned, but of course not surprised, to hear the Leader of the Opposition claim that the cost of the new Women's and Children's Hospital had 'blown out' by more than $1 billion under this government—a deliberately disingenuous and misleading assessment of the reality of one of the most important infrastructure projects this state will ever see, because—

Mr Cowdrey interjecting:

The SPEAKER: Member for Colton!

The Hon. S.C. MULLIGHAN: —right up until March of this year those opposite were claiming that the build costs for the new Women's and Children's Hospital would be $1.95 billion, a figure first given to them in early 2019, three years earlier. Remarkable! Of course, as we know, we have done in the last six months what those opposite failed to do in the previous four years and put a rigorous and robust process—

Mr Cowdrey interjecting:

The SPEAKER: Member for Colton!

The Hon. S.C. MULLIGHAN: —in place to come up with an accurately costed—

Mrs Hurn interjecting:

The SPEAKER: Member for Schubert!

The Hon. S.C. MULLIGHAN: —robust project which can now be taken to market. After the review was completed, the cost of the plan of those opposite for the new Women's and Children's Hospital—that one on the constrained site—was $2.7 billion to $2.8 billion. That was the accurate cost of what they were pretending was less than $2 billion.

If we really want to know the farce of the situation presented by those opposite in recent times, in their most recent budget they only had $814 million budgeted for the first four years of what they pretended to be a 5½ year construction period. So $800 million for the first four years and $1,135 million over the last 15 months. That was the approach of those opposite, but of course—

Mr Brown interjecting:

The SPEAKER: Member for Florey!

The Hon. S.C. MULLIGHAN: —they hadn't done the work and they hadn't put the right figure in, let alone the money in the budget for it. I am not wholly and solely critical of those opposite about their approach to managing the inflationary environment construction costs because not all things went up over the three years leading up to the last election. There was some deflation of some items. For example—

Mr Whetstone interjecting:

The SPEAKER: The member for Chaffey is called to order.

The Hon. S.C. MULLIGHAN: —in March 2019—

Members interjecting:

The SPEAKER: Member for Colton! Member for Frome!

Members interjecting:

The SPEAKER: Order!

The Hon. S.C. MULLIGHAN: —there were 25 members of the parliamentary Liberal Party, and in the lead-up to the last election that had shrunk to 22. So there was deflation in some parts of the economy, so perhaps they can't be held solely to account for it.

Members interjecting:

The SPEAKER: Order!