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Legislative Council - Fifty-Fourth Parliament, Second Session (54-2)
2021-05-26 Daily Xml
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Timber Shortage

The Hon. F. PANGALLO (14:34): I seek leave to make a brief explanation before asking the Treasurer a question about the state's timber shortage crisis.

Leave granted.

The Hon. F. PANGALLO: South Australia's building industry, which undertakes about $16 billion worth of work every year and employs more than 65,000 South Australians across all sectors, as well as indirectly supporting tens of thousands more South Australian jobs, is rapidly approaching a valley of death due to a crippling national and international timber shortage.

The perfect storm brewing has been caused by the success of the HomeBuilder scheme, including more than 14,000 applications in South Australia, a spike of up to 400 per cent in some countries for the price of imported timber that Australia would normally take and delays in timber being imported into the country due to COVID restrictions.

There is a genuine fear in the building sector that the situation will have a catastrophic domino effect across the entire state with significant job losses and many small to medium-sized businesses going bust if the issue isn't addressed now. There are fears that many tradies won't have incomes after July and many businesses will be forced to start shedding jobs by September or October.

If timber can't be supplied to build houses, carpenters won't get paid for putting up plaster boarding and frames, bricklayers won't get paid for laying bricks and electricians won't get paid for wiring houses. The businesses that supply those tradies won't get any orders for materials and so it continues. With material price rises on the way, HomeBuilder projects for first-home owners are also likely to blow out.

So my question to the Treasurer is: what urgent action is the government taking to protect the state's building sector and improve timber stock in the state? Have you met with members of the building industry to discuss the crisis and, if so, what were the outcomes and were any proposals or initiatives put to the government which require its financial support and commitment?

The Hon. R.I. LUCAS (Treasurer) (14:36): There is no doubting that the enormous success of the HomeBuilder scheme and other stimulus activities have placed pressure on the housing industry but, with the greatest respect to my parliamentary colleague the Hon. Mr Pangallo, I sense a touch of the 7.30 Report in the use of the language that the honourable member is using to portray the challenges confronting the industry, because phrases such as 'the valley of death', 'catastrophic' and various other phrases I don't think accurately portray the state of the residential housing sector in South Australia at all.

Let me confirm to the honourable member that 12 to 15 months ago the same language was being used by representatives of the housing industry, and I think probably a touch more accurately, at the start of COVID. They lobbied furiously for action from the federal and state governments to provide stimulus activity for the residential housing sector and the enormous success of HomeBuilder, together with the First Home Owner Grant from the South Australian government, meant that we saw this enormous response from applicants and from the housing sector.

With great respect, I think what the honourable member fails to portray in his colourful language is that there are a significant number of builders—and this is part of the criticism from those who haven't been able to access timber, the smaller and medium-sized builders in particular—who have locked away agreed contracts, already have access to timber and will continue to employ carpenters, builders, electricians and plumbers, because they have locked and loaded all that they need, albeit it might be at a slightly higher price than they originally contracted for. Those particular sectors of the residential housing market, who I have ongoing discussions with, are going to continue in a state which I would refer to as 'going gangbusters'.

They will continue to operate fairly successfully because they don't have the sorts of problems that the honourable member has rightfully identified are confronting a number of builders who are not in that particular position. But to say that the whole sector is facing a valley of death and we are facing a catastrophic situation overstates, in my humble view, the true state of the residential housing market in South Australia.

It is true to say that a number of small and medium-sized builders who have not been able to access timber for some of the reasons that the honourable member has mentioned, and for some other reasons as well—and also other products as well; steel, for example, is in short supply—are facing great difficulty. I've got no doubt that there are a number of those who, if they are not able to resolve it, may well find problems in terms of their ongoing viability.

I am not disputing that, but to portray the whole residential housing sector as confronting a valley of death and catastrophic conditions is not an accurate portrayal of the residential housing market in South Australia.

The Hon. C. Bonaros: You might want to tell that to the builders.

The Hon. R.I. LUCAS: Well, I said that to the Housing Industry Association, the Master Builders and a number of others, so I am not saying anything here that I haven't said to people whom I have met in relation to it. The situation now, in terms of residential housing, is much improved on the situation we were confronting 12 months ago, and for anyone not to acknowledge that is to not acknowledge the reality of responses from the federal and state governments to what we confronted 12 months ago.

In relation to acknowledging that there are challenges in relation to timber shortages, steel shortages and a range of other shortages to which I have indicated—even simple things like kitchen sinks and a variety of other essential supplies for not just the residential housing market—we are finding the same challenges, for example, in the billion dollar plus school upgrade build that we are confronting at the moment, in terms of getting things like sinks and a variety of other things like that. So there are challenges that the success of the enormous stimulus activity, created by the state and federal governments, has created in South Australia.

In terms of the government response, yes, I have met with a number of the interested parties and stakeholders representing the building industry and others. The primary carriage for this has been, as I think the member knows, with the Minister for Primary Industries, the minister for forestry, my colleague Mr Basham. He and others have had ongoing discussions with representatives of the industry. I think the member will be aware that there has been a series of meetings between the government and stakeholders.

There have been media reports of a request to access a federal government—and I don't know the exact title of it—bushfire recovery fund, which appertained in particular to timber products and the forestry industry generally, which some of the Eastern States industry sectors had evidently accessed at an earlier stage. As I understand it, there is a request that's gone in to access that particular federal government pot of money. If it's specifically designated for this area, there would appear to be a very good argument that South Australia should also be able to access some of that money to assist the industry.

The PRESIDENT: The Treasurer will bring his answer to a conclusion.

The Hon. R.I. LUCAS: Well, it's not a Dorothy Dixer; it was a very long question—

The PRESIDENT: No, you have been going for over six minutes.

The Hon. R.I. LUCAS: —from the Hon. Mr Pangallo. I am sure I will get supplementaries. But to conclude, in terms of the discussions, the detail of those has been conducted by my colleague the Hon. Mr Basham, and I am sure there have been discussions about accessing federal funds. There may well have been requests, as I understand it, in terms of him having access to things like the regional development fund and a variety of other pots of money that he has available to him as the responsible minister. We will await the conclusion of those sorts of discussions, I guess, to see what may or may not eventuate.

The PRESIDENT: The Hon. Mr Pangallo has a supplementary.

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