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Timber supply can't keep up with demand as housing boom comes after Black Summer bushfires

The federal government is being urged to intervene in the national timber industry, as the construction and forestry union forecasts the sector will not be able to meet demand fuelled by the national construction boom.

The Commonwealth's HomeBuilder program, which provides grants for people building or renovating homes, is being cited as one of the main drivers of construction activity across the country.

The coronavirus pandemic has fuelled a desire in many Australians to search for more living space, but supplies of building products such as timber frames are simply not there to meet that surge.

Modelling by the CFMEU suggests the amount of construction across the country will require 2.1 million cubic metres of timber framing this year, but current capacity across the nation's sawmills is only sitting at 1.8 million cubic metres.

A global construction boom is putting pressure on international supplies, hampering efforts to meet that 15 per cent shortfall with imports.

Bushfires that ripped through Australian plantations in late 2019 and early 2020 have also hit domestic forestry reserves.

CFMEU National Secretary Michael O'Connor wrote to Housing Minister Michael Sukkar, Industry Minister Christian Porter and Assistant Minister for Forestry Jonathon Duniam earlier this week, requesting an urgent meeting to discuss support for the forestry sector.

"Otherwise, what will happen is that not only will we not address the current crisis that we have, this crisis will get a lot worse," he told the ABC.

Mr Sukkar has previously foreshadowed moves to ensure stockpiles can be better shared across the country, evening out the workload.

"We should be looking at where the resource is now — is there some resource that needs to be moved from one location to another," Mr O'Connor said.

"That's exactly what needs to be done, someone needs to be looking at it."

But Mr O'Connor argued long-term planning was needed to ensure the nation does not face a similar crisis in the future, including consideration of more plantations across the country because "we're short a significant amount".

Senator Duniam said the federal government was "doing everything we can together with industry to meet the growing demand".

"The government convened a roundtable on 10 June 2021 with representatives from the building and forestry sector to discuss possible solutions to issues surrounding timber supply," he said in a statement.

"We will continue to work in partnership with industry and individual businesses as the economy recovers from the 2019-20 bushfires and impacts of COVID-19 to strengthen businesses, jobs and communities."

Executive Officer of the Frame and Truss Manufacturers Association of Australia Kersten Gentle said it was a remarkable shift in fortunes for the building industry.

"From what I've been told, Albury [in NSW] normally does 600 homes a year, they've already signed up 2,000 homes for the year," Ms Gentle said.

"You've got builders all around the country that normally would do 70 homes, they've signed up 200 homes; or builders that would do 2,000 homes have signed up 3,000 homes."

Ms Gentle argued it would have been hard to avoid the pressure on supply chains, considering how dire the situation was at the height of the pandemic in 2020.

"This time last year, or even earlier last year, people were winding down their businesses thinking that the market was going to crash," she said.

"Nobody, nobody in Australia predicted that we were going to have this massive housing boom.

"The stress levels are through the roof."

Ms Gentle said that while timber was a clear concern for the forestry sector, the construction boom was putting significant pressure on a wide range of building products – including roofing iron and bricks.

The federal government has already tweaked its HomeBuilder scheme twice, to extend the time for projects to get underway and remain eligible for grants.

Originally it was three months. That was stretched to six months, before being kicked out to 18 months in April this year.

But with increased demand for products forcing prices up, Ms Gentle said further tinkering could be required – particularly for new home builds.

To be eligible, the value of a new home could not exceed $750,000.

"If building materials are increasing, will that push the price of the house for someone over $750,000, and will they then have to pay back HomeBuilder?" Ms Gentle asked.

"So there's some massaging and some work that still needs to be done."


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