Building on state’s $8.3bn capital spend

21/05/2009 - 00:00

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THE building and construction sector has welcomed the state government's record capital works program, as the industry looks to the government to stimulate activity while private sector investment languishes.

Building on state’s $8.3bn capital spend

THE building and construction sector has welcomed the state government's record capital works program, as the industry looks to the government to stimulate activity while private sector investment languishes.

The government has committed to a record $8.3 billion infrastructure investment in 2009-10 in areas including social housing, schools, roads, hospitals and prisons.

A record $1.06 billion will be spent on improving school assets in 2009-10, including $566 million in federal funding.

The government will provide $572 million for health-related infrastructure in 2009-10.

The industry has eagerly awaited the results of the government's capital works audit, with project cuts delivering $3 billion in savings across the forward estimates.

Architecture firms were some of the most affected, with some halting projects mid-way through the planning and design stage and others forced to lay off staff.

"The industry has been crying out for some government capital works expenditure because the private sector has been so quiet," Jones Coulter Young director Richard Young said.

"There was an initial flurry of retrenchments before Christmas when things really hit; I think a lot of people were hanging on and trying to keep staff until the capital works came out.

"For us, we got through it better than we thought. Before Christmas we wondered how we were going to make it through to May. But here we are. Now we're working on trying to win the work."

Metropolitan and regional builders are also set to benefit.

BGC director Sam Buckeridge has applauded the government for the inclusion of 14 new schools and health-related infrastructure spending.

He said the government now needed to roll-out the program promptly to meet its targets.

"The capital works program sounds good if the state is able to proceed with it without too long a delay. The plan to build 3,600 new social houses over the next four years is a laudable goal, both on equity and economic stimulation grounds," he said.

"But, on indications to date, the state government may struggle to achieve the required building schedule.

"BGC is actively pursuing winning a share of these projects. The government should also get on with streamlining local government planning approval processes.

Dan Perkins, managing director of Bunbury-based Perkins Builders, said the stimulus, particularly the schools package, was needed and would have an immediate positive effect.

But in the medium to long term, he said there was concern the spending could create a 'mini-boom' scenario.

"We have to be pragmatic in our engagement with the stimulus, in that we don't create a mini boom in trade resources. If we collectively intensify, it could put upwards pressure on prices," he said.

 

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