Victoria, NSW ready bail-outs for construction companies

Late last month, it was reported that the NSW Government was preparing a rescue package for ‘too-big-to-fail’ Metricon and the industry:

The NSW government at its most senior levels is scrambling to finalise a twin rescue package for the state’s building industry and customers of construction giant Metricon amid fears the company is at imminent risk of collapse…

One option being examined is a rescue package at a cost of hundreds of millions of dollars that would shore up industry players at risk of collapse due to a confluence of factors, including the pandemic, rising material costs, recent flooding and labour shortages…

A second package would be targeted at Metricon to complete some 300 active construction sites, or compensate buyers of house and land packages that may not be able to be completed.

Sources familiar with the company’s finances who spoke on condition of anonymity said cashflow remained dire and, without assistance, the business was teetering on the verge of bankruptcy.

According to the Herald-Sun, the Victorian Government is also examining a rescue package for Metricon and other construction firms:

[Treasurer Tim] Pallas said ensuring the residential housing construction industry made it though serious financial pressure was a priority…

[Pallas] said a decent share of his attention was now focused on the state of the market in Victoria…

“As you would appreciate with fixed price contracts, we’re seeing a bit of pressure in that market.

“The government’s looking at what it can do to assist.”

Mr Pallas said he didn’t want to announce the government’s strategy ahead of time, but said there were ways the state could offer support that would be revealed soon.

While I feel sorry for builders grappling with soaring costs, this looks to be another case of “privatise the profits and socialise the losses”.

It is a shame the billions of taxpayer dollars spent on HomeBuilder stimulus and industry bailouts weren’t instead invested in social housing projects.

Unconventional Economist

Comments

  1. drsmithyMEMBER

    The punters who – assuming they can even find someone to do work – paying absurd amounts will surely wonder how anyone connected to the building industry could be going broke.

    • My favourite thing in this Gaslighting scenario that no one – not even MB investigating why so few workers??? National tiles advertising for 80 new staff???? How many covID related [email protected]???!! How many folk stood down, sacked, told to take leave or walked away cos they chose not to be coerced into no [email protected]@b no j0b. Wilful ignorance or complicity by analysts, commentators & govt etc??? ???????????
      Victorian State government going as far as outright mocking & pi$$ taking with Treasuy House at top of Collins St in Melbourne..literally the focal point of demonstrations, protests etc during mock downs…now adorned with 2 posters for the museum. They stretch between 2 columns and from top of steps to bottom of first floor…a whole storey!!! They celebrate LOST JOBS – featuring a guy on a ladder sparking up s gas lamp AND celebrated history of protests in Victoria for all things rainbows /unicorns & faux feminism:: What was that slogan Let’s GO. Brandon …F00K Dan ANdrews & his cronies

  2. Goldstandard1MEMBER

    Hmm I think its wasting taxpayers dollars on something that won’t save them anyway. As everything contracts there will be PLENTY of builders around with not a lot of work in 6 months.

    Agree with the waste and social housing comment completely as ppl are about to need it big time.

  3. rob barrattMEMBER

    Ah yes. Developers form shell companies, leveraged to bVggery, then they wind them up the instant the build and sale has happened before the abysmal quality of the building work becomes obvious. Owners problem don’t you know.

    Of course they need rescuing, along with the malarial mosquito……

  4. You can’t just bail them out…they have to at least be somewhat taken over, and/or the states take massive equity – just something.

    Else, this is terrible capitalism – they took the risk and din’t have the right contracts, then they fail, and we pick up the pieces is a sensible way….but don’t just bail them out….crikey….

    • darklydrawlMEMBER

      Sadly, your “Plan B” option (bail out ya mates, screw the taxpayers in a time of crisis) is usually the chosen route. These folks are only capitalists when they are lining their pockets. Soon as a loss (for them) looks likely they are ‘all in’ Commies.

  5. As long as it doesn’t help small business, Dan Andrews will throw money at anything. Victoria is dead broke. What’s a few hundred million more?

  6. Oh Totes where art thouMEMBER

    It is a shame the billions of taxpayer dollars spent on HomeBuilder stimulus and industry bailouts weren’t instead invested in social housing projects.

    Tell that to the former Housing Minister and holder of the most marginal seat in the country Michael “Shady” Sukkar. Sadly he survived the purge.

  7. Camden HavenMEMBER

    This is more about giving confidence to creditors subbies etc.

    More likely that building industry bails out Victorian government.😏

  8. P1ssed the money up against the wall as usual. Know at least one builder who bought a private jet since covid started. They just happened to lose a few franchisees lately too. So much more could have been done with the money.

    • I wonder how much Metricon has donated to political parties over the years. Not many builders would have the phone number for a pollie they can call a favour in on.

    • Save all of em..there’s paddocks of scrub stretch all the way from Rockbank to Mundaring in WA with subdivision potential maaaate:( Lots of empty Qantas, Jetstar & virgin planes to fly in new homeowners

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