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Construction downtime sparks concerns as industries grind to a halt

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The housing construction sector risks millions in lost work if it cannot scramble to make up for lost time following the six-day lockdown that has brought building sites and heavy industry to a standstill for one of the first times in the state’s history.

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The industry in SA had been flying ahead of today’s lockdown, but Master Builders SA says the lost time could be the difference between builders being able to meet the strict criteria of HomeBuilder grants and not.

The Federal Government’s $25,000 HomeBuilder scheme was announced in June and gives recipients until the end of the year to lock in their build. Builders then have three months to begin construction from the date the contract is signed.

The grants are administered by Revenue SA in South Australia.

“Residential builders were already flat out trying to get things started for HomeBuilder in time and now they are wondering what’s going to happen with the shutdown,” Master Builders SA CEO Will Frogley said.

“We’ve been completely shut down, which is more than what happened in Victoria when they were having more than 700 new cases a day.

“We’ve been speaking with the government and asking if it’s possible to stop the clock or give it a six-day additional period for builders to commence building – or however long it takes if there’s an extension of this shutdown.”

ABS figures released this month showed September’s house building approvals in South Australia reached the highest level in almost five years.

The seasonally adjusted number of houses approved in the state during September reached 803 in September, the highest level since 814 were approved in April 2016.

At the time, Frogley said the figures reflected the success of HomeBuilder, which he expected to continue to rise in the coming months.

He said the six-day shutdown also posed a threat to the commercial building industry.

“We are concerned about some clients pursuing liquidated damages if builders aren’t able to deliver specific requirements of the contract in time, when this is clearly not the builder’s fault,” Frogley told InDaily this morning.

“When building and construction stops, the South Australian economy pretty much stops so we’re really hoping to work with the government and the construction unions to make sure we can re-open as soon as possible and hopefully that will be Wednesday.

“It will do really big damage to the economy if building construction is shut down for an extended period – we’ve got about 70,000 South Australians directly employed in the industry and I’d be worried about their jobs if we have a sustained shutdown.

“A lot of people are panicking at the moment so we’re going to communicate with our members, but as it gets closer to Wednesday we’ll be ramping up pressure for our industry to reopen at the end of the six days.”

The unprecedented shutdown has also brought the state’s 70,000-strong manufacturing industry to a standstill.

Australian Manufacturing Workers’ Union SA state secretary Peter Bauer said food manufacturers, PPE companies such as Detmold, and the Whyalla Steelworks were still operating, about 90 per cent of the industry had been forced to shut down.

He said workers had been placed on either special COVID leave or were expected to use their long service or annual leave entitlements during the shutdown.

“It will be disruptive but we’re supportive of the initiative taken by the government to prevent the spread of this virus,” Bauer said.

“This came out of the blue yesterday lunchtime and I don’t think many people were expecting it so I haven’t had a lot of contact from companies other than those wanting to talk about how they will pay their workers and what they should be telling them.

“Everyone just wants to see this pandemic go so we can get back to life as normal and manufacturing can start thriving in this country.

“It had started to bounce back and there was more emphasis on local manufacturing given the global situation but we haven’t had the chance to bounce right back yet because of this.”

The defence manufacturing industry has also shut down, with the Collins Class sustainment and Hunter Frigate projects coming to a standstill at Osborne.

BAE Systems Australia runs ASC Shipbuilding, the company responsible for delivering the $35 billion Hunter program, which will build nine anti-submarine warfare frigates at the Osborne Naval Shipyard in what is being described as the largest surface ship project in Australia’s defence history.

BAE has about 2000 employees in SA – 1000 on the Hunter program mainly at Osborne and 1000 at its Edinburgh Parks manufacturing facility.

Both facilities have been closed for the duration of the six-day lockdown.

A BAE Systems Australia spokesperson said many workers were able to continue to work from home during the lockdown.

“We’re closely monitoring the impacts of COVID-19 on the operations of our business and we are continuing to work closely with our customer and stakeholders,” the spokesperson said.

“Due to the nature of the work currently underway on the Hunter Class Frigate Program the majority of our employees will be able to continue their work from home.

“This short closure is not expected to cause significant impact to the program.”

ASC runs the Collins Class Submarine sustainment program at Osborne where it has about 900 staff. It also has about 450 staff in Western Australia where work is continuing uninterrupted.

An ASC spokesperson said all ASC staff in South Australia, except those necessary for site security and maintenance, would remain at home for the duration of the lockdown.

Staff not able to work from home would be granted “COVID leave” specifically designed for such situations.

“ASC remains in close contact with the Department of Defence and Federal and South Australian Governments, to ensure a return to normal operations at the earliest opportunity,”
the spokesperson said.

Grain Producers SA chairman Adrian McCabe said farming had been declared an essential service and the grain harvest was in full swing across most parts the state with farmers working around the clock.

He said most areas were about halfway through harvesting while some parts of the state’s South East region were yet to begin.

“We’ve got a massive crop to get off and it’s good quality so it’s critical for the state’s future that the farmers get on and bring this big crop in,” McCabe said.

“We’re working in isolation pretty much anyway and there hasn’t been any COVID cases in rural South Australia for quite some time and there isn’t any at the moment.

“So we’ll be very cautious and respect that COVID’s a massive issue for our country but for us in agriculture we’re able to work on in isolation and get on and do our business.”

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