Western Australia's economy is headed for another Boom/Bust.
Industry fears job cuts as State halts capital works over $20m
19th December 2008, 7:00 WST
The State Government has halted all government infrastructure projects worth more than $20 million in a move that property leaders warn will spark widespread job cuts among architects, engineers, builders, surveyors and suppliers.
A spokesman for WA Treasurer Troy Buswell confirmed that all major capital works projects that had not proceeded to tender were being reviewed so that hard decisions could be made in the light of the State’s deteriorating Budget outlook.
“Significant savings can only be achieved by re-examining projects of a significant size,” he said. It is believed the total value of the reviewed projects is close to $3 billion.
Australian Institute of Architects WA president Rod Mollett said the delay in government projects, combined with the economic downturn and the fact the commercial property sector had put projects on hold, would have a devastating effect.
“People are already being laid off in architectural firms,” he said. “I know there have been firms that have put off up to 10 probably out of a staff of 25 or 30. It seems to be going against what the Government is talking about, trying to bolster the economy.”
One architectural firm said companies stood to lose millions of dollars over canned projects.
“There will be significant cash flow problems, staff redundancies and in some instances, if some companies are running one or two major projects in their office, it could close them up,” the firm’s spokesman said.
“The main issue of this decision the Government has made is the suddenness of it and the fact it is affecting most projects because most capital expenditure for the Government is over $20 million.”
Master Builders Association of WA executive director Michael McLean said in hard times the industry relied heavily on the public sector, and if there was a downturn in public works jobs would undoubtedly go.
“Clearly it is bad news for our industry, which is really a barometer for every other one,” he said.
Joe Lenzo, executive director of the WA division of the Property Council of Australia, said Government stimulus to the construction and development industry was needed now.
“We would rather see these projects go ahead now and not go ahead during a boom period when the private sector is going flat out,” he said.
Engineers Australia WA director Janice Lake said the decision would make long-term planning more difficult for engineers, particularly in the current economic circumstances.
“It will bring another degree of uncertainty,” she said.
The Treasurer’s spokesman said the Department of Treasury and Finance would make recommendations to Cabinet as part of the 2009-10 Budget.
