The Civil Contractors Federation SA (CCF SA) said that if the Coalition’s pre-budget announcements today and new procurement reforms by the Labor Government are implemented, the Civil industry is set to boom in South Australia.
CCF SA Chief Executive, Ms Rebecca Pickering said the Coalitions commitment of $2.8bn of federal funding towards new and existing road infrastructure projects, including $456M on new road projects, productivity and road safety packages is one of the wins from the federal budget for South Australia.
“Local and regional civil construction businesses, including: road constructors, earth movers, traffic management personnel, and many industry suppliers, will all benefit from the ongoing commitments to improve, maintain and build new road infrastructure projects across our State,” she said.
However, one of the dampeners to the many federal budget positives is escalating material costs, including fuel which increases direct construction costs and freight expenses. Pickering said that the ‘Making the public dollar work’ policy by the new South Australian Labor Government is timely given current concerns.
“Rising material costs have become extreme, and contract clauses governing cost escalation are back in focus, as the civil industry grapples with an unprecedented coalescence of challenges. World events, extreme weather occurrences, rising inflation, interrupted production and pervasive labour shortages are straining on our industry.
“We support a review of government contract conditions to ensure contractors on Government projects are not penalised for increases in costs completely outside of their control. For example, situations where contracts do not contain, or are not open to, cost escalation considerations; or factor in changing business circumstances. Contractors are still expected to meet original budgets, even those well outside tender validity timeframes. As the civil industry continues to ramp up to meet existing and new demands, these challenges are expected to persist well into the future,” Pickering said.
The new SA Labor Government’s committed procurement reforms include: requiring government departments to pay contractor invoices within 15 days, assisting local business to become tender ready, requiring 1% of government funding into a sub-contractor support fund and a commitment to broadly publicise government procurement opportunities three months in advance, are all positive and will assist industry through these complex times.
“We are keen to work with the Malinauskas Labor Government to support these much needed procurement reforms and our focus will also turn to the upcoming South Australian State Budget to ensure critical needs such as ongoing road maintenance commitments of $800million are acknowledged and remain a permanent fixture in all future state budgets,” she said.
Pickering went on to say that there was no doubt that the civil construction industry was a significant industry employer with more than 2000 direct and indirect jobs needed to undertake this work, in addition to current labour forecasts.
“The rapid growth in local and remote civil construction activities as a result of infrastructure work will continue to drive work force demands and a wealth of employment opportunities – meaning our apprenticeship program has never been so important," she said.
Other federal measures include the extension to the Boosting Apprenticeship Commencement (BAC) wage subsidy until the end of 2021-22, which provides employers with 12 month wage subsidy support.
“This extension will support the work force growth and will allow more businesses to take on new or additional apprentices. The new Civil Apprenticeship trades including road construction, pipe laying, tunnel construction, traffic management, earthworks and mobile plant operation, provide proven pathways into secure and lucrative trade professions in the civil industry.
“The demand from industry is high, and will remain so for many years to come. We are very pleased with this extension,” said Pickering.
Whilst CCF SA maintains its industry voice on priority commitments, Pickering went on to say that the funding of Civil Apprenticeships will also remain a critical priority as they do not attract the $20k trade support loan and subsidies which fall $4,000 short overall per apprentice, in comparison to other building and construction trades.
“Civil Apprentices and the civil industry should not be disadvantaged in comparison to their trade peers,” she said.
“The ability of the South Australian economy to maximise the economic benefit from the federal budget in the short to medium term remains dependent upon our state’s ability to work together, meet Federal Government project milestones, and implementing new procurement reforms – but the future is bright if we do,” Pickering said.