The coronavirus pandemic has sent shockwaves through nations and economies, from disrupted supply chains to restrictions on social interactions to slow the spread of the virus. For many construction sites throughout Australia, however, work continues.
Master Builders Australia Victoria (MBAV) announced recently it received confirmation that both the Australian Prime Minister, Scott Morrison, and the Victorian Premier identified construction as an essential industry. This means it is exempt from shutdowns being imposed on many other industries, including hospitality, tourism, and travel. It is understood from Master Builders Australia that other states and territories are also likely to exempt the industry from current shutdowns.
For many construction sites throughout Australia, however, work continues.
The Federal Government has also announced two packages of economic support that will help the construction industry navigate these challenging times. They include a 50 per cent wage subsidy for apprentices, and wage support measures for small and medium enterprises. MBA said there are currently more than 380,000 apprentices in the building and trades sectors.
The second package includes direct cash payments to ensure companies can keep paying wages, and the establishment of the Coronavirus SME Guarantee Scheme which will support small and medium enterprises to get access to working capital. The government will guarantee 50 percent of new loans issued by eligible lenders to SMEs.
“We commend the Government for its commitment to doing what it takes to see the country through the health and economic shock of COVID-19 and we restate the importance of building and construction as an essential service,” said Wawn in an MBA media statement.
MBA has called on the government to bring forward planned capital works and major infrastructure projects.
“Accelerating construction of current projects and bringing forward construction of shovel ready projects, big and small, would provide an immediate strong impetus for building firms to take up tax write off and investment incentive measures,” Wawn said in the MBA response to measures.
States and Territories are preparing stimulus packages in addition to the support announced by the Federal Government.
The New South Wales stimulus package includes some measures that will help keep construction trades in work. They include more than $250 million to bring forward maintenance on public assets like social housing and crown land fencing, and $500 million to bring forward capital works and maintenance.
In addition, it has announced a waiver of payroll tax for businesses with payrolls of up to $10 million for three months. Master Builders NSW noted this is expected to become effective from May 2020, so those businesses will be exempt from payroll tax for the rest of the financial year.
New Health and Safety Requirements in Place
Master Builders Victoria said that while the Victorian Government has confirmed sites can continue normal operation, strict social distancing and hygiene practices are now required.
MBA recommends building firms consult the recommendations of the Department of Health for the latest information and advice about Coronavirus; Safe Work Australia for information and referrals about dealing with Coronavirus in the workplace; and Your State or Territory workplace health and safety body
There are also a number of online training courses being released, including one developed by the Green Building Institute in association with the Australasian Infection Control Society, and Biological Services Australia.
Limits on Interstate and International Travel
Some states and territories are imposing whole-of-region rules. The Northern Territory, Tasmania, South Australia, and Western Australia have put in place strict border controls that require most travellers entering the state to quarantine for 14 days, with very limited exceptions.
“Our industry remains nervous about how protracted the inevitable shortage and delayed delivery of imported building products will be.”
It is yet to be determined how this will affect projects using workers or consultants from interstate for projects. Australia’s national border is also closed to all foreign travellers, including workers and businesspeople, and any returning Australian Citizens or Permanent Residents must enter quarantine for 14 days on arrival.
There are some key commercial challenges to navigate.
“There is a risk that building activity will contract due to projects being delayed, put on hold or shelved and shortages of imported building materials,” Wawn stated in an MBA press release. “Our industry also remains nervous about how protracted the inevitable shortage and delayed delivery of imported building products will be.”
Coronavirus Impact on Building Materials
Master Builders Queensland has said shortages are already being felt by the industry, particularly in relation to products from China including taps, valves, glass, nails, bolts, iron and steel. For many of these products, there are Australian-made products that can also do the job, MBQ said.
MBQ recently added some guidelines for builders experiencing delays due to the coronavirus. They include, checking with suppliers before placing orders; managing delays caused by non-supply of products contractually and in writing; submit claims for Extension of Time to the Date for Practical Completion within timeframes noted in the contract; and, for new contracts, factor in delays wherever possible.