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Housing Minister Julie Collins says it’s a matter for the states.
During a recent doorstop interview, Collins expressed her sympathy for tradies, subcontractors and consumers who have been impacted by major building companies going bust, but she nonetheless suggested that support should come from states rather than the federal government.
The remark came in response to a journalist who referenced the recent collapse of the Tasmanian franchise of GJ Gardner Homes, asking if federal government support would be offered for the contractors or home owners left thousands out of pocket.
“I feel for the tradies and the subbies who are not going to get paid. I feel for the home owners whose lives have been wrecked by the collapse of this housing company, GJ Gardner Homes, here in Tasmania,” Collins said.
Noting the scope of the problem, she acknowledged that builder insolvencies are being experienced “around the country, unfortunately”.
But when it comes to support, particularly for professionals, Collins pointed to the states’ responsibilities in protecting them from financial hardship due to circumstances out of their control.
“The former federal government commissioned a review called the Murray Review. It was released in 2018. There are 86 recommendations. Only one of them is for the federal government. Most of the roles and responsibilities here are at the state level,” Collins said, referring to a report recently commissioned into protections for payments to contractors in the building industry.
“What we want to do is work with states and territories to address those recommendations. Clearly, there are things that need to be done at the state level,” Collins remarked.
In Tasmania specifically, the Housing Minister’s home state, she noted that the last government had made some progress but she felt that “clearly, they need to do a bit more, and clearly we need to protect consumers and the tradies”.
With builders across the country feeling the pinch of rising costs, and margins maintaining at extremely tight levels, 2024 has continued to be a challenging year for the building industry.
The latest figures from consumer watchdog ASIC indicate that insolvencies in construction are up 32 per cent in the financial year to date compared to the year prior, which also saw elevated levels of builders going bust.
It’s not good news for the federal government’s aim of building 1.2 million new homes in five years, with the clock set to start ticking in less than three months, at the start of the new financial year.
Recent building approval figures also show that in an environment where accessing finance can be hard, appetite for building has declined.
According to the Australian Bureau of Statistics, in seasonally adjusted terms, the number of total dwellings approved in the month of February fell 1.9 per cent to 12,520. The value of new residential building dropped 19.1 per cent over the month to $5.79 billion, mostly driven by losses in private sector dwellings excluding houses, which were down 24.9 per cent. Private sector house approvals, meanwhile, rose by 10.7 per cent.
Buyer’s agent Daniel Walsh recently noted that compared to the rate of population growth, the country is falling woefully behind its needs, let alone its goals.
Annual building approvals of 176,043 for the year ending February 2024 represent just 26 per cent compared to net national population growth of 659,800, Walsh commented.
“You simply can’t have such a significant gap between demand and supply without it resulting in soaring property prices,” he said.
“Plus, the latest monthly building approvals show that the situation is just getting worse with high interest rates and construction costs decimating the building industry and with it any semblance of a balanced market,” Walsh stated.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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