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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2022-05-19 Daily Xml
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Building and Construction Industry

Mr FULBROOK (Playford) (14:58): My question is to the Minister for Housing and Urban Development. How is the state government monitoring current pressures being experienced by the building and construction industry?

The Hon. N.D. CHAMPION (Taylor—Minister for Trade and Investment, Minister for Housing and Urban Development, Minister for Planning) (14:58): The building and construction industry is a barometer for our state's economy. It employs 74,000 people. It has played a significant role in stabilising our economy, obviously, through the COVID-19 pandemic.

With the federal election only a couple of days away, we know that so many people are focused on housing affordability—whether Australians can own their own home, get into the housing market, and the like—so it is a matter of public consternation.

We know that the federal government's HomeBuilder stimulus has boosted economic activity by some $120 billion. The building works supported by this program—some $41.6 billion—has created some 374,000 jobs. That's all good news, but of course what it has also done is drag an enormous amount of demand forward at precisely the time we are now hitting serious supply side constraints, which are almost all generated by events beyond our control—by the closing down of China, by the war in Ukraine, by a whole range of issues.

An honourable member interjecting:

The SPEAKER: Member for Flinders!

The Hon. N.D. CHAMPION: Key industry stakeholders, such as the Master Builders Association, the Housing Industry Association and the Urban Development Institute of Australia have all brought this up as a key concern. The Sydney Morning Herald reported that several commercial and residential builders in Sydney have already gone into receivership because of the pressures associated with rising costs, logistical delays and a globally fractured building material supply chain. Essentially, builders are being locked into loss-making, fixed-priced contracts that are inconsistent with the rapidly changing price of building materials.

CoreLogic's Cordell Construction Cost Index for quarter 1, 2022, showed that national residential construction costs have increased 9 per cent over the 12 months to March 2022. This is the highest annual growth rate outside the introduction of the goods and services tax. We know that the ABS figure showed that building product rises rose by 3.8 per cent during the December 2021 quarter and that they are now 12 per cent higher than they were a year ago. We are not immune from those factors.

We have seen severe price spikes to building materials over the year December 2021, and that is not limited to:

reinforcing steel rising 43.1 per cent;

structural timber prices, 39.7 per cent;

steel beams/sections rising 24.8 per cent;

plywood/board, 17.2 per cent;

plastic pipes and fittings, 24.7 per cent;

copper pipes and fittings rising 24.1 per cent;

aluminium windows and doors, 14.9 per cent

metal roofing and guttering rising 14.8 per cent;

insulation up 10.6 per cent;

electrical cable and conduit up 14.6 per cent;

terracotta tiles up 9.5 per cent;

concrete tiles up 5.9 per cent;

clay brick prices up 6.6 per cent; and

ceramic tiles up 6.2 per cent.

An honourable member interjecting:

The Hon. N.D. CHAMPION: A member is interrupting me, but these are serious matters for builders so you should not make fun of them. I have written to—

An honourable member interjecting:

The SPEAKER: The member for Flinders is called to order. The minister has the call.

The Hon. N.D. CHAMPION: I have written to the ACCC because I think this environment provides the exact environment where there might be price gouging, where there might be a lifting of prices, where there might be margin taking. I have written to the ACCC asking them to look at it.

An honourable member interjecting:

The Hon. N.D. CHAMPION: Well, what have you done about it? Zero. That's zip—zero is what you have done.

The SPEAKER: Order! The minister will not respond to interjections.

The Hon. N.D. CHAMPION: Zip, zero is what you have done.

The SPEAKER: Order!

The Hon. N.D. CHAMPION: I have also written to the federal trade minister asking him to extend—

Members interjecting:

The SPEAKER: Order!

The Hon. N.D. CHAMPION: But what we have said—

Members interjecting:

The SPEAKER: Member for Flinders! The minister has the call.

The Hon. N.D. CHAMPION: —is that we reserve—

Members interjecting:

The SPEAKER: Member for Morphett!

The Hon. N.D. CHAMPION: —our right to act in the future.

The SPEAKER: The minister's time has expired.

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