Building and Construction Industry

The Hon. J.S. LEE (15:19): I seek leave to make a brief explanation before asking the Minister for Businesses Services and Consumers a question about the building and construction industry.

Leave granted.

The Hon. J.S. LEE: It was reported by the Master Builders Association that the collapse of builder Tagara is a sign that the industry is in turmoil. Tagara is abandoning $70 million worth of projects and, from last week, had tradesmen walking off the job after failing to get payment guarantees. It is believed subcontractors are owed between $15 million and $20 million. Master Builders Association chief, John Stokes, says construction work in the commercial building industry was down 23 per cent from five years ago. He stated that the industry is pretty much in crisis and, unfortunately, what has happened in the Tagara case is one of the sorts of snapshots of what can happen when the building industry is in crisis and perhaps is not getting the support it needs.

At last Friday's inaugural state conference of the Civil Contractors Federation, the Chief Executive Officer Phil Sutherland called on governments to do more to support the building industry through the current economic emergency. Mr Sutherland said that, 'The industry is really struggling right across the construction sector,' and 'We would anticipate there will be more business failures.' My questions to the minister are:

1. What measures will the government put in place to safeguard the building and construction industry that is in turmoil?

2. With so many subcontractors being owed lots of money, with no payment guarantees, what legislative reform will the government introduce to protect small to medium size subcontractors?

3. Can the minister outline the full impact on jobs and business failures in the industry?

The Hon. G.E. GAGO (Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy, Minister for the Status of Women, Minister for Business Services and Consumers) (15:21): I thank the honourable member for her most important question. Indeed, the state of our building and construction industry is something that we watch very carefully and look to constantly, and that is why this government has invested so much in infrastructure development.

You don't have to look very far to see our new SAHMRI building, our new Adelaide Oval and our Royal Adelaide Hospital that is yet to be completed. We have master plans for the Riverbank Precinct and a master plan for Port Adelaide. We are a government that invests in and encourages investment in infrastructure development, and we know that leads to building and construction jobs.

In 2014-15 our Major Developments Directory, released by the Premier last December, lists 326 projects, including 88 new projects either underway or in the investment pipeline worth around $94.6 billion. Independent modelling by the SA Centre for Economic Studies estimates that the number of direct and indirect jobs from 84 of these new projects would peak at 10,400 jobs in 2015-16.

Also, in our recently announced budget, we have outlined the way this government goes about assisting business because, often, many of these building and construction firms are smaller to medium size businesses. In the past, we have supported growth and investment through payroll tax concessions, reformed WorkCover (estimated at $180 million savings to businesses), helped to build a skilled workforce and provided more help for businesses to win government work through initiatives such as Tender Ready in collaboration with Business SA.

We have also put together a new private sector development coordinator role for the chief executive of the Department of the Premier and Cabinet to assist lodged projects valued at over $3 million to clear bureaucratic hurdles and, also, we have established a new, simpler regulation unit to work with industries to remove or improve regulations so that businesses can better support jobs growth.

Of course, in our recently announced budget, we announced a wide range of stimulus packages of $985 million over four years. Of course, at the centre of that is major tax reform. This will help business as well. Key changes include abolishing share duty, abolishing stamp duty on non-real property transfers, abolishing stamp duty on non-residential property transfers, abolishing stamp duty on genuine corporate reconstructions, not to mention abolishing the Save the River Murray levy and, of course, extending the small business payroll tax rebate to 2015-16, and no new state taxes, with the state government ruling out the broad-based land tax on the family home. So, you can see there are a raft of measures that we have put in place to assist the building and construction industry in particular, but also businesses generally in this state.