Construction industry
Mr DAVIS (Southern Metropolitan—Leader of the Opposition) (12:11): My question is to the Minister for Small Business. Minister, the small businesses in the building and construction sector are under huge pressure, with surging inflation, specifically the cost of building materials, and in the domestic building sector many businesses are caught in the pincers of rising costs and fixed-price contracts. I therefore ask: what steps or advocacy have you taken or will you take as small business minister to assist these small builders?
Ms PULFORD (Western Victoria—Minister for Employment, Minister for Innovation, Medical Research and the Digital Economy, Minister for Small Business, Minister for Resources) (12:12): Our government is acutely conscious of the impacts of rising business costs on our business community, whether they be contractors, self-employed people or larger businesses, and of course through the construction industry, which is the focus of Mr Davis’s question, it is not in any way uncommon for there to be multiple layers of contracting in the delivery of a project where you might have a large head contractor and a whole lot of much smaller businesses that are subcontracting.
The challenges that exist that are impacting the construction industry I think are well known and understood, but they do include things like freight costs, timber supply from Russia, steel supply, workforce availability and a very busy commercial and public sector pipeline of projects as well. We are really conscious of the cost escalation impacts on construction, particularly for those who have contracts locked and loaded at prices from, say, six or 12 months ago now needing to deliver in a higher cost operating environment. The government are taking a number of steps, where we can, to ameliorate the things that are within our control, and my department is regularly meeting with peak industry organisations. The Treasurer indeed has been leading discussions with many people from throughout the construction industry. His advisory group is headed now by Rebecca Casson, again somebody with whom I and other colleagues are in regular contact.
The other thing that I would add, and it is part of the problem but not an insignificant part of the problem, is access to raw materials close to production sites. I am sort of veering out of my small business portfolio into my resources portfolio, but we are working really closely with the extractives industry to look at the role that extractives can play in terms of meeting demand and therefore placing downward pressure on costs. In road construction it might be as much as 50 per cent of the costs; in housing construction I think it is more like around 30 per cent of the cost, but it is significant. So we are working in a number of different ways to make sure that those are approvals are occurring as quickly as they possibly can within a very heavily regulated environment.
Mr DAVIS (Southern Metropolitan—Leader of the Opposition) (12:15): I therefore ask—and I thank the minister for that response: which small businesses and which small builders have you met with?
Ms PULFORD (Western Victoria—Minister for Employment, Minister for Innovation, Medical Research and the Digital Economy, Minister for Small Business, Minister for Resources) (12:15): I have met with very few people at all in the last week because I have been back in iso with the dreaded coronavirus infection. But certainly I can assure you that the Treasurer is leading engagement with the construction industry and that I, my office and our department are in constant contact with the dozens and dozens of industry peak organisations, and of course then when individual organisations seek to engage with us we do so.