Kevin Dudd.

[Zedn]

Boxhead,

The stimulus package worked yes, but not for long. I dont know what its like up there, but if its anything like here Mr Rudd is the reason why you cant get a reasonable concrete price.

I work as a consultant to the building industry in NSW and a lot of my clients are tied up in the BER works that are going on. One of my clients is also a managing contractor for the scheme. In my opinion the scheme has worked for what it was intended to do, stimulate the building industry. However, too quickly and there are a lot of draw backs.

Firstly the fact that so much money was spent so quickly meant that everyone was suddenly flat out. This drove prices through the roof as subbies were pricing work they didnt want or need. Combined with the requirement for it to be local labour, managing contractors had to accept these prices.

Secondly, managing contractors were adding there management fee on which normally would be government overheads. Hence the media circus about the price of the jobs. These managing contractors also are required by accreditations they hold to implement Quality, safety and environmental management systems that typically wouldnt come into play until the job is over $10M. This takes a lot of time to implement and uses resources that cost money, plus the little builders doing the work had to also implement these systems when most had never heard of a safe work method statement let alone a whole management system.

Thirdly, the builders all hired site management staff to run the sites because they didnt have enough existing employees.

Fourthly the builders doing the work all had to provide bank guarantee's meaning they have money tied up for a period during and after the projects.

And finally the problems. There is no more work on the horizon for all of these builders. Even if there was they have been too busy to price it, and they cannot demonstrate financial capacity to win more work because of the guarantee's. They will start to let people go.

I will put money on the fact that the building industry will be in a huge recession at the end of the year or early next year. Right at the time Liberal will come into power and have to clean up the mess. You can bet labour will be saying that its happened because they are out.

Interesting times in Canberra tonight!