Small construction businesses fear industry shutdown won’t end on time

construction shutdown

Samuel Tastzidis, owner of Above Building in Sydney. Source: Facebook.

Small businesses in Sydney’s construction industry doubt the NSW government will lift the ban on building early, despite lobbying efforts by industry groups to get businesses operating as soon as possible.

On Wednesday, Business NSW chief executive Daniel Hunter called on the state government to lift the two-week shutdown of Sydney’s construction industry after seven days, albeit with reduced operating conditions to help prevent the spread of COVID-19.

Samuel Tastzidis, owner of Above Building in the Northern Beaches, says it’s more likely the construction shutdown will be extended rather than lifted sooner.

“I don’t think it will end early but it would be good to get clarification about doing jobs outside of Greater Sydney,” Tastzidis says.

Wage bills continue

Tastzidis’ residential building company employs eight staff and has a large network of subcontractors, including carpenters, electricians, plumbers and tilers.

Over the weekend, Tastzidis rushed to prepare five building sites for the two-week pause, after learning that all construction work must cease from Monday.

“We have five projects running at the moment. Two were due to be completed this week, and the deadlines on the others will be heavily affected,” he says.

While Tastzidis is unable to pay his subcontractors, he’s still paying his regular staff wages, despite there being no work available.

“We tried to give them a little bit of work to keep them busy in the warehouse sorting stuff out but that only really lasted a day.”

Recent analysis by IBISWorld found revenue in the national construction industry declined by 6.5% in 2020-21 to $410.7 billion due the negative effects of the pandemic, and Melbourne’s extended lockdown.

While IBISWorld forecast industry revenue to gradually improve over the next five years at 0.8% annually, that estimate did not factor in the effects of any future lockdowns.

Business NSW estimates $800 million to $1 billion of revenue will be lost for each week the industry shutdown is enforced in Greater Sydney.

No more JobKeeper 

Alex Djukic, owner of Gold Leaf Landscapes in Sydney’s Baulkham Hills, says he has reduced his team from nine to three employees over the last year, and currently works with about 10 subcontractors.

Djukic doesn’t expect the NSW government to lift the restrictions within a week and says a fortnight of restrictions could see him lose up to $30,000.

“This is going to drag on for another month easily,” Djukic tells SmartCompany.

“Judging by how much I would have made, and wages included, I’ll probably lose about $20,000 to $30,000 in two weeks,” he says.

Applications for NSW COVID-19 business grants are now open, offering businesses between $7,500 to $15,000 depending on how much their turnover has declined.

Djukic has applied for the grant but he says even if he’s successful, the money won’t flow immediately.

“Obviously it doesn’t happen immediately. In the meantime, I’ve had to fork out the money out of my pocket for my workers, and their wages,” he says.

With Sydney’s lockdown stretching into its fourth week, and Victoria, South Australia and parts of Central NSW also under stay-at-home orders, unions and industry groups have renewed calls for the reinstatement of JobKeeper.

However, Prime Minister Scott Morrison rejected the idea in a press conference on Wednesday, saying the COVID-19 disaster payments offer Australians the equivalent level of support.

“These payments are the same level of payment that was being provided in the December quarter in JobKeeper. Exactly the same,” he said.

“The only difference is they’re being paid by the government direct, not through your employer.”

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