Another construction company falls as rumours swirl about Metricon’s $100 million bailout package
Sunshine Coast builder Pivotal Homes became the latest in a string of companies to call in the liquidators late on Thursday.
One of Queensland’s biggest home builders has gone into liquidation, while the NSW government is reportedly scrambling to build a bailout package for the country’s largest building company as pressures mount in the construction industry.
Sunshine Coast builder Pivotal Homes became the latest in a string of companies to call in the liquidators late on Thursday with managing director Michael Irwin blaming rising labour and construction costs for the downfall.
Irwin says he had never seen the construction industry in this level of crisis in his 30 years in the sector, with the exponential rise in material costs seeing businesses like Next, Condev, Probuild and Privium all fold in the last six months.
It comes as rumours continue to swirl about the future of Metricon, the nation’s largest building company for six years running — it has repeatedly denied experiencing solvency issues, with figures at the top saying it was “business as usual”, but reports this morning suggest the company is nearing bankruptcy.
Representatives from Infrastructure NSW, Treasury, the office of Premier Dominic Perrottet and the State Insurance Regulatory Authority were in talks yesterday about a bailout, which could be hundreds of millions of dollars in value.
The rescue package could allow Metricon to complete 300 ongoing construction projects, or compensate customers who have purchased house and land packages that cannot be completed.
A week ago, Victorian Treasurer Tim Pallas said Metricon had paid all its trade creditors on time and he expected this to continue.
“We understand the pressure on builders on the eastern seaboard due to increases in costs, and the impacts this is having on the construction industry and residential clients,” Pallas said after the meeting on May 19.
In addition to material costs, labour shortages are placing massive strain on the construction industry, with both the NSW and Victorian state governments now in conversation with the Albanese government to fast-track migrant worker visas.
Education, healthcare and construction are the worst-hit sectors for worker shortages, with tradie jobs with outpacing job seekers by a wide margin on the Seek, yet Perrottet says accredited overseas workers are waiting up to 18 months for a working visa at the moment.
“I was speaking with Victorian Premier Daniel Andrews last night on this exact issue … we will be working very closely together with the Prime Minister to address that, and it needs to be addressed as soon as possible. We can’t wait,” Perrottet said.
“I’ve already raised with the Prime Minister the issue in relation to attracting skilled labour into our state and into our country. This is not an issue that’s unique to NSW.”
Perrottet says the post-pandemic recovery hinges on our ability to fill worker shortages in order to bolster the nation’s productivity.
“We’re in a very different place today than we were two years ago because we didn’t have the shortages that we are seeing in many industries across our state and across our country … whether that’s in construction, whether it’s in teaching, whether it’s in nursing.”
It comes just one month after The Business Council recommended permanent migration be lifted to 220,000 places in 2022-23, with up to 70% — about 154,000 workers — reserved for the skilled stream.
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