$2 billion a week – NSW construction shutdown doubled lockdown cost

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The Sydney Covid lockdown was expected to cost New South Wales $1 billion a week, but the closure of construction across Greater Sydney has doubled that to $2 billion – according to the Commonwealth Bank’s head of Australian economics. By comparison, Melbourne’s weekly lockdown bill is $700 million.

Shutting down any economy is a costly exercise for the government, but some industries create a bigger bill than others. Construction is one such part of the economy that state premiers have been hesitant to stop in the interests of public health.

As of the 2021 Federal Budget, the bill for the pandemic rests at $311 billion.

The decision to stop work in construction has left thousands of customers stranded with their homes and businesses in various states of completion – a problem made worse by public health orders trapping people in their homes.

The Federal government ran the HomeBuilder grant between 2020-2021 at the end of the first lockdown. It was designed to spur on the construction industry as part of Australia’s economic recovery. There’s a feeling within the industry that NSW construction businesses have been abandoned mid-project by the sudden shutdown.

HomeBuilder forms part of a range of Australian Government initiatives intended to support confidence in the residential construction sector and encourage consumers to proceed with purchases or renovations that may have been delayed due to uncertainty around the effects of the COVID-19 pandemic. 

Approval for new projects surged to 99,243 for new builds and 22,110 in renovations under the HomeBuilder grant, but many of those who made use of the offer have been left mid-operation with the fate of their subcontractors in doubt.

The cost of delaying projects sparked by the government’s initiative is expected to spiral, leaving another group of Australians holding the Covid bill.

Anger over the snap shutdown of Sydney’s construction industry, with all non-essential work to stop until July 30, has caused the NSW Chief Health Officer Kerry Chant to confirm that it was not done on her advice.

“Clearly we’re not the experts in logistic chains and other things and so we need that whole of government approach to determine what things are critical, what things are not,” insisted Chant, at a press conference on Monday. “Our objectives of decreasing workplace attendances, decreasing the opportunity for interactions, is what we need to achieve. The matter for how that is done is really a matter for broader government.”

Both Chant and the NSW Health Minister Brad Hazzard came forward to clarify that any decision to close critical industries rested with the government.

A Public Health Order was given to all construction sites in Greater Sydney beginning July 19 with an extensive list of requirements for workers carrying out essential operations.

Under the latest COVID-19 health restrictions, all construction across Greater Sydney, including the Central Coast, Blue Mountains, Wollongong and Shellharbour, must pause from 12.01am on Monday, 19 July until 11.59pm on Friday, 30 July. These changes follow health advice to further limit the spread of the COVID-19 Delta strain.

Meanwhile, NSW Premier Gladys Berejiklian said that all political decisions to close industries and enforce lockdowns had been done based upon health advice, presumably from Chant and Hazzard.

The premier reiterated the importance of government acting upon critical health advice, but did not specify exactly who it was that made the call.

“And the critical health advice we received was the absolute risk of workplace transmission and the fact that thousands and thousands of people were moving around the community throughout greater metropolitan Sydney.”

The press conference confirmed that all health directives were being made by the wider NSW government based directly on the advice of health information.

“In the case of the crisis COVID cabinet, we also take advice from a range of sources. I know sometimes the media refers to it as just health advice, but there’s the public health team, led by Dr Chant [...] there’s also the operational side of health,” said Hazzard.

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