‘People’s dreams’: ScoMo responds to home builder crisis

Prime Minister Scott Morrison has responded to an urgent crisis engulfing one of Australia’s largest home builders.

Scott Morrison says he is concerned over reports construction giant Metricon could be on the brink of collapse.

The company is undertaking crisis talks with major clients including the Victorian government this week.

The Prime Minister said relevant federal ministers had been in contact with Metricon – one of Australia’s largest home builders – to help work through the issues they’re facing.

“The priority here is to ensure that people get their homes built, sites remain open and that the company is able to get through these difficulties,” Mr Morrison said on Thursday.

“Both the Victorian government and the federal government obviously take the matter very seriously. There is over $2bn worth of housing work being done Metricon and that is people’s dreams, their homes.”

Metricon acting chief executive Peter Langfelder acknowledged the company was struggling with industry-wide issues but denied it was close to liquidation.

“We’ve got a strong history of performance, all our contracts in place are profitable, we’re completely up to date with all our trades, our suppliers, our employees, commissions, everything is completely up to date,” Mr Langfelder told reporters on Thursday.

Scott Morrison told reporters issues facing Metricon also threatened people’s “dreams”. Picture: Jason Edwards

Earlier this year two major Australian construction firms, Probuild and Condev, were forced to appoint liquidators, leaving thousands of employees and subcontractors in the lurch.

Industry experts said the fact construction firms were struggling came as little surprise, given a “perfect storm” of adverse factors driven by the pandemic.

Material costs have surged due to a combination of supply chain issues and increased demand following government-led initiatives to drive the construction boom.

“This is what we will look carefully at in relation to the issues with Metricon. The supply chains, that is what the pressure is on inflation in this country,” Mr Morrison said.

He said more could be done to manufacture materials onshore to help offset disruptions overseas.

“We were at a brick and tile business earlier today with new technology with is in this space, and that is really important and we need to strengthen that,” the Prime Minister said.

Metricon acting chief executive Peter Langfelder denied the company was at risk of going into liquidation, but admitted it was facing industry-wide challenges. Picture: Kiel Egging

Following reports of Metricon's cashflow issues, concerns swelled that homebuyers that could be left out of pocket if the company goes under.

Also in the firing line could be the company’s biggest client, the Victorian government, which has a reported $195 million worth of state housing contracts in development.

Victorian Premier Daniel Andrews confirmed talks were underway between his government and the company and said support would be considered.

“Lets see what support they want and need and we will make assessments about what is appropriate to do,” Mr Andrews said.

“Our door is always open ... we work with many different companies facing many different challenges and the Treasurer will sit down with that particular business.”