Timber crisis a ‘significant risk’ to jobs amid push to secure 300,000 tonnes of Kangaroo Island logs for SA market

Australia’s lack of construction materials is threatening at least 100 SA businesses and can destroy 5000 jobs, parliament has been told.

At least 100 businesses and potentially thousands of jobs could be at risk owing to a shortage of building materials, parliament has heard.

The head of the Master Builders SA has for the first time put a figure on potential job losses across his industry from a building supply shortage that has led to long delays for materials and increased prices.

MBA SA chief executive Will Frogley told a timber inquiry on Tuesday a “conservative estimate” of at least 100 companies could be at “significant risk”, equating to “somewhere between 4000 and 5000 jobs”.

“They aren’t all home-building companies, but that would include subcontractors as well,” he said.

“But obviously carpenters are in the firing line because they are so heavily dependent on getting their hands on timber.

“We’re already getting our host employers saying ‘if we can’t get timber soon, we’re going to have to put our apprentices on suspension.”

The MBA, Kangaroo Island Plantation Timbers and Morgan Sawmill, at Jamestown, have lobbied the state and federal governments to provide a $2 million subsidy to shift 300,000 tonnes of pine logs from KI for processing at the mill.

It is estimated the logs would provide enough structural timber for 10,000 homes. The state government is also considering a proposal to co-fund a $4m upgrade of the sawmill to process the timber.

Mr Frogley told The Advertiser that getting timber to market would be a “massive game changer”.

“Securing this massive resource for local builders will enable the industry to get on with the job, continue to fast-track our social and economic recovery and help South Australian move into their new homes sooner,” he said.

He said about 4000 extra South Australians had been employed in the past year in the building industry. Much of that growth, he said, could be attributed to HomeBuilder, which provided up to $25,000 in government funding to new housing construction.

The Morgan family would process timber from Kangaroo Island.

Lack of imported product and unprecedented demand for new housing due to Covid induced spending and HomeBuilder stimulus have conspired to constrain supply of critical building components.

A shortage of materials and price increases from its suppliers has forced Bianco Construction and Industrial Supplies to increase timber prices by 15 per cent this month.

In a circular to customers it warned of a five month delivery delay for roof trusses and that price for steel products had also increased by up to 26 per cent.

“...we regret to advise that we continue to receive price increases and notices of product shortages across the majority of our product lines,” the circular said.

“Increases are considered seriously before these steps are taken; unfortunately this is caused by the unforeseen circumstances we continue to experience.”

Mr Frogley told parliament the delivery delay on trusses was “three times” longer than before the timber shortage.

Primary Resources Minister David Basham met with federal Assistant Forestry Minister Jonathon Duniam on Thursday to discuss the freight funding proposal.

“Minister Duniam … asked the state government to further develop a proposal with state and commonwealth involvement, that could support the industry,” a spokesman for Mr Basham said.