SA-Best MP Frank Pangallo
The South Australian Government has been accused of failing to manage to critical lack of building timber in the State. SA-Best MP Frank Pangallo, who is also a member of a Select Committee investigating the state’s timber industry, said SA’s critical $16 billion building sector was about to enter a “Valley of Death” situation which would have a “catastrophic domino’s effect that is expected to be felt across the entire state”. Source: Timberbiz
A “perfect storm” is responsible for the nation’s timber shortage caused by the success of Homebuilder across the country (where more than 140,000 have applied for the grant), a spike of up to 400% in the price of timber exported from Australia, and delays in timber being imported into the country due to COVID restrictions.
“Sadly, the State Government has again been caught asleep at the wheel in failing to manage this emerging crisis,” Mr Pangallo said.
“If timber can’t be supplied to build houses, carpenters won’t get paid for putting up the frames, bricklayers won’t get paid for laying the bricks, electricians won’t get paid for wiring the house, the businesses that supply those tradies won’t get any orders for materials…and so it continues,” he said.
SA-Best MLCs Connie Bonaros and Mr Pangallo on Wednesday announced they would hold an emergency summit on 2 June with all key industry stakeholders in an attempt to develop a blueprint to avoid the crisis from worsening, which many fear will force significant job losses and businesses to close.
Those invited to attend the summit include key industry associations such as the Master Builders Association of SA, the Housing Industry Association, the Plumbers Association of SA and National Electrical Contractors Association, some of the state’s leading timber producers and suppliers, and SA’s largest homebuilders.
“It’s scandalous that timber logs from local plantations are now being shipped offshore to India and China because of the high prices suppliers are fetching and demand from Europe and the United States,” Mr Pangallo said.
“Local growers are fulfilling their contractual obligations with local sawmills and suppliers – many of which were written well before the Homebuilder boom – but instead of helping these businesses meet their huge increases in demand are preferring to ship their excess stock to overseas markets due entirely to the better profits they can make,” he said.
“That processed timber is likely to find its way back here at much higher cost than if it was processed by local sawmills, which are crying out for supplies, is a disgrace,” he said.
“We have the ludicrous situation in South Australia where Forestry SA recently rejected a tender from a local sawmill – Morgan’s at Jamestown – to supply government-owned timber from the Mount Lofty Ranges. We need to know if that contract went to a company that exports to China and elsewhere – and was the decision made entirely on dollars.
“We also need to know whether sawlog from the State’s South East is also finding its way to the lucrative overseas markets. If this is happening – and I am of the belief it is, our Federal and State Governments need to step in immediately to save jobs and business here from collapse. The priority must be local.
“Already there is genuine fear many tradies won’t have incomes after July and many businesses will be forced to start shedding jobs by September or October,” Mr Pangallo said.
“Worse still, there are grave concerns significant numbers of jobs will be lost and many small to medium sized businesses will go bust if the issue isn’t addressed as a matter of urgency.”
Ms Bonaros said the situation required immediate attention and “not the lame action the government has given the rapidly-emerging crisis to date”.
“SA-Best has been informed by a number of builders that there is not enough timber stock in the state to meet their full orders,” she said
“Hundreds of projects are being started to meet the conditions of the Federal Government’s Homebuilder scheme, but builders are then moving on to kick-start other projects and not being able to give owners any indication when they will return to complete jobs.
“We’re told it’s a shambles out there with builders and suppliers trying to source as much timber as they can so they can start building projects while at the same time the very same suppliers are rationing their stocks – not fulfilling full orders in order to spread the supply of timber.”
If building companies started to collapse, as many in the industry were predicting, the knock-on effects would be catastrophic with thousands of home owners potentially left with nothing more than a concrete slab on their property.
“The situation is only expected to get more severe as the shortage worsens – unless the Federal and State Governments act quickly to address the situation they’ve unintentionally created,” she said.
Mr Pangallo also criticised the State Government for its “unacceptable” delay in making a decision on whether to approve a proposed $40 million deep-water wharf development at Smith Bay on Kangaroo Island.
The harbour is needed to ship an estimated 4.5 million tonnes of timber a year off the island
Mr Pangallo said former Planning Minister, Stephan Knoll, was on the verge of approving the project before his resignation in July last year.
Kangaroo Island Plantation Timber says the only alternative to get timber off the island is for trucks to drive through Kingscote from 6am to 8pm six days a week under a new plan put to the council and the government by T-Ports which wants to load logs on barges then ferry them out to a ship.
Mr Pangallo said that would spell disaster for KI’s central tourism hub and could see two companies withdraw their significant, much-needed tourism and commercial developments on the foreshore.
“Turning Kingscote into a busy industrial port will be an unmitigated disaster for the town and I do not believe the locals have been fully informed of the dire consequences. How the council could endorse this plan without proper consultation with Islanders defies belief,” Mr Pangallo said.
He also repeated his request for Planning Minister, Vickie Chapman, to recuse herself from the final decision-making process given she a sixth-generation local on the island where she remains a landholder and farmer.
“The Minister and her family have significant rural land holdings on Kangaroo Island so any decision she makes one way, or another may be compromised or misinterpreted as a conflict of interest,” Frank said.
“To avoid that, the final decision must be made by another Minister, the Treasurer or the Premier,” he said.
