Coronavirus threatens building projects
Major building projects involving shops, offices, airports and hotels are set to be delayed by at least a month because of the coronavirus, amid calls for a national security strategy to bolster the country’s fuel and medicine stocks.
Retired air vice-marshal John Blackburn said the epidemic had delivered a wake-up call and required a fresh look at the nation’s vulnerability to disasters and external shocks.
He says Australia’s lack of a domestic fuel reserve and overwhelming dependence on the international shipping fleet for imported goods is problematic.
“We need to address our resilience as a nation,” Blackburn says.
“We are tied into a global supply chain and a global connectivity that is very different to the past. We need to ask — what are the risks? That doesn’t mean we cut ourselves off. But one of the questions you’ve got to ask is what sovereign capabilities do we have in Australia?”
Australian Shop and Office Fitting Industry Association CEO Gerard Ryan says his members are preparing for delays to projects of between four and six weeks, but the longer the outbreak went on, “the worse that will get”.
About 98% of lighting comes from overseas, while marble, tiles, and bathroom and door products are often sourced from Europe.
“Any delay potentially stops the whole project. It’s like a jigsaw puzzle — everything needs to follow something else,” Ryan says.
“If you can’t get your tiles or flooring down, that’s going to affect something else. If you can’t get your electrical work, cabling and lighting finished then that also affects something else.”
Workers are potentially at financial risk if that happens and employers will struggle to support their employees without government support
In feedback to the ASOFIA, one lighting supplier said even if China’s factories started full production in the next couple of weeks they would not expect to see stock arriving until June or July under a best-case scenario.
Bob Richardson, chairman of the Australian Construction Industry Forum’s research council, says materials for building facades, components and finishes were affected as contractors sought extensions for projects.
“The problem is many contracts don’t have contract clauses that allow extension for this type of occurrence,” he says.
“It’s going to be something of a contractual issue and it may come down to how the particular clients view the problem.”
Ryan says the government could let construction companies defer business activity statement lodgments and payments for at least six months; extra cash for consumers would also help the industry.
Small businesses affected by the bushfires were given a two-month lodgment and payment deferral for activity statements.
The government could also offer financial support for employers whose full-time or casual staff may need to be quarantined for 14 days and have insufficient sick pay to cover them.
“Workers are potentially at financial risk if that happens and employers will struggle to support their employees without government support,” he says.
Industry Minister Karen Andrews, who will host a roundtable meeting with business groups, manufacturers and other stakeholders on Wednesday, said the Morrison government was looking at ramping up local manufacturing to ease disruption to supply chains. “Anecdotally, what we’re hearing is that the supply chains are OK,” she told the ABC.
This article originally appeared on www.theaustralian.com.au/property.
