❓ Ms. Quirk asks about the impact of COVID-19 on WA's housing construction and requests an update on the $150 million housing investment package. The Minister responds, acknowledging industry challenges and detailing government actions to support the sector, including accelerating social and affordable housing projects.
AnsweredQoN 313Legislative Assembly
QuestionView source ↗
HOUSING INVESTMENT
PACKAGE
313. Ms M.M. QUIRK to the Minister for Housing:
I refer to the impact of COVID-19 on
Western Australia's housing construction industry. Can the minister
update the house on the McGowan Labor government's $150 million housing
investment package, including how it will protect jobs and support economic
activity during this uncertain time?
PACKAGE
313. Ms M.M. QUIRK to the Minister for Housing:
I refer to the impact of COVID-19 on
Western Australia's housing construction industry. Can the minister
update the house on the McGowan Labor government's $150 million housing
investment package, including how it will protect jobs and support economic
activity during this uncertain time?
AnswerView source ↗
I
thank the member for Girrawheen for the question. It is a very important and
very timely one given the circumstances we find in the housing
construction industry, particularly in the residential construction industry.
Of course, those in multi-unit apartment buildings would be no less taxed and
challenged in relation to the opportunities for their projects to get up.
We are very clear in our
understanding of the situation with the various constructors. We talk almost
daily with the peak bodies: the Housing Industry Association, the Master
Builders Association, the Urban Development Institute of Australia and the
Property Council of Australia. They are in constant dialogue with the
government, assisting us to understand the circumstances in which these
constructors find themselves. One thing is clear: the sorts of challenges that
they have had over the last five years are nothing but have been good
preparation for what they are going through right now. They are very agile,
very lean and very focused on the opportunities as they present themselves, and
that is quite evident.
The challenge for them at this stage, unfortunately, is the
bind that they are caught in. For members of the house, by way of background,
it takes about nine months from when somebody walks into a display home to when
they walk into their home. The process of committing to that significant
purchase and that construction is quite involved. In fact, 75 per cent of the
full-time equivalent of a building company is contained in the first phase.
Under the housing Construction Contracts
Act, they can take a progress payment of only $2 000 or $3 000. The overhang
and the overheads for the business at this level are quite significant
at the front end; therefore, they are relying on the throughput through the pipeline of those projects coming into their
final phase of construction, as progress payments become more and more
significant towards completion. As that pipeline is drying up—those
larger amounts of revenue that come through the business at the back end of
these contracts—they are faced with only a very small number of
contracts entering the front end of the pipeline. In fact, it is a quite
significantly small number. The Housing
Industry Forecasting Group, which has long been an established cross-industry
and government group that identifies and forecasts future new housing growth,
brought out a report last week in which for the first time in the history of
that organisation it made no forecast about the next financial year. It made no
forecast about the next financial year because
it is too difficult to determine what the COVID-19 circumstances have wreaked
upon our economy.
Members opposite want to castigate the government for
scrapping, if you like, or putting aside an economic plan that we had when we came to government, which was
based on the assumption of what we would inherit when we came to
government, and say that we do not have an economic plan. I can tell members
that that is far from the truth. In a place of crisis, strong leadership is
what works—a strong unity of command and centralised leadership that identifies the crisis response
required and acts on it. That is what we have with the current McGowan Labor government. The government is focused on the crisis—that is, the
health requirements of the people of Western Australia and then their economic
aspirations and how we can meet them. We had one of those examples today, when
the Premier said that if any minister has something that they can bring forward
in their capital works program that could assist in creating more jobs right
here and now, he or she is to do so. I did that this morning. We brought
forward $150 million for the social and affordable housing program that was
announced last December to ensure that it starts flowing by 1 July. That work
has been undertaken. We will refurbish 70 houses, which will create jobs
immediately. We will build 300 social and affordable dwellings and a further
200 shared-equity houses across Western Australia. About 90 of those dwellings
will be in the regions as well, by way of interest. In this way, the government
actually has an economic plan that responds to the crisis confronting Western Australia,
and there is more to come. Thank you.
thank the member for Girrawheen for the question. It is a very important and
very timely one given the circumstances we find in the housing
construction industry, particularly in the residential construction industry.
Of course, those in multi-unit apartment buildings would be no less taxed and
challenged in relation to the opportunities for their projects to get up.
We are very clear in our
understanding of the situation with the various constructors. We talk almost
daily with the peak bodies: the Housing Industry Association, the Master
Builders Association, the Urban Development Institute of Australia and the
Property Council of Australia. They are in constant dialogue with the
government, assisting us to understand the circumstances in which these
constructors find themselves. One thing is clear: the sorts of challenges that
they have had over the last five years are nothing but have been good
preparation for what they are going through right now. They are very agile,
very lean and very focused on the opportunities as they present themselves, and
that is quite evident.
The challenge for them at this stage, unfortunately, is the
bind that they are caught in. For members of the house, by way of background,
it takes about nine months from when somebody walks into a display home to when
they walk into their home. The process of committing to that significant
purchase and that construction is quite involved. In fact, 75 per cent of the
full-time equivalent of a building company is contained in the first phase.
Under the housing Construction Contracts
Act, they can take a progress payment of only $2 000 or $3 000. The overhang
and the overheads for the business at this level are quite significant
at the front end; therefore, they are relying on the throughput through the pipeline of those projects coming into their
final phase of construction, as progress payments become more and more
significant towards completion. As that pipeline is drying up—those
larger amounts of revenue that come through the business at the back end of
these contracts—they are faced with only a very small number of
contracts entering the front end of the pipeline. In fact, it is a quite
significantly small number. The Housing
Industry Forecasting Group, which has long been an established cross-industry
and government group that identifies and forecasts future new housing growth,
brought out a report last week in which for the first time in the history of
that organisation it made no forecast about the next financial year. It made no
forecast about the next financial year because
it is too difficult to determine what the COVID-19 circumstances have wreaked
upon our economy.
Members opposite want to castigate the government for
scrapping, if you like, or putting aside an economic plan that we had when we came to government, which was
based on the assumption of what we would inherit when we came to
government, and say that we do not have an economic plan. I can tell members
that that is far from the truth. In a place of crisis, strong leadership is
what works—a strong unity of command and centralised leadership that identifies the crisis response
required and acts on it. That is what we have with the current McGowan Labor government. The government is focused on the crisis—that is, the
health requirements of the people of Western Australia and then their economic
aspirations and how we can meet them. We had one of those examples today, when
the Premier said that if any minister has something that they can bring forward
in their capital works program that could assist in creating more jobs right
here and now, he or she is to do so. I did that this morning. We brought
forward $150 million for the social and affordable housing program that was
announced last December to ensure that it starts flowing by 1 July. That work
has been undertaken. We will refurbish 70 houses, which will create jobs
immediately. We will build 300 social and affordable dwellings and a further
200 shared-equity houses across Western Australia. About 90 of those dwellings
will be in the regions as well, by way of interest. In this way, the government
actually has an economic plan that responds to the crisis confronting Western Australia,
and there is more to come. Thank you.
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