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Councils rejoice over $1.8 billion cash splash

Councils rejoice over $1.8 billion cash splash

Queensland councils are the big winners out of the federal government’s $500 million roads and infrastructure stimulus program – the largest single injection of COVID relief funds for local government to date.

Prime Minister Scott Morrison announced on Friday that Australian councils will share half a billion dollars of federal funding through the Local Road and Community Infrastructure Program.

Funding allocations take into consideration road length and population, as well as recommendations of the Local Government Grants Commission, and are calculated in a similar way to the Roads to Recovery program and the road component of the Financial Assistance Grants.

Australia’s biggest council by population, City of Brisbane, was allocated almost $12 million, while Gold Coast and Moreton Bay Councils were each allocated in access in of $5 million.

Toowoomba received $4 million and Logan City, Moreton Bay, Sunshine Coast and Western Downs are eligible for around $3.5 million.

All up, 12 Queensland councils will get more than $2 million of funding each, as will 13 Victorian councils and seven in NSW.

State by state, NSW takes home the lion’s share of funding with $139.3 million. Queensland and Victoria both netted more than $100 million in funding.

The roads and infrastructure boost is part of a $1.8 billion stimulus package which includes the bringing forward of $13 billion worth of Financial Assistance Grants.

“Our funding boost will help councils accelerate priority projects that will employ locally and support local business and also stimulating our economy,” Prime Minister Scott Morrison said in a statement.

“We know this is going to be vital support, particularly for councils that have faced the combined impacts of drought, bushfires and now COVID-19.”

The peak body for local government in Australia, ALGA, described it as “tremendous news” for councils, staff and elected representatives.

Councils will need to submit applications for their allocated funding, which will be available from July 1.

State by state funding under the Local Road and Community Infrastructure Program

  • NSW: $139.36m
  • Vic: $101.73m
  • Qld: $101.70m
  • WA: $73.51m
  • SA: $44.93m
  • Tas: $16.28m
  • NT: $14.54m
  • ACT: $7.97m
Relief for councils
The Municipal Association of Victoria said the funding was crucial to recover from COVID-19 and stimulate economies.
“Local economies have suffered from the economic downturn brought about by the COVID-19 pandemic and Black Summer bushfires. Councils, supported by Federal and State Governments, will play a pivotal role in driving local economic recovery,” President Coral Ross said.

LGAQ President Mark Jamieson said the funding was welcome relief for councils that had been wearing significant revenue losses as a result of coronavirus, while providing support and stimulus to residents and business.

“We thank the Federal Government for listening to Queensland councils and their counterparts across the country and delivering much-needed stimulus at this critical time,” Cr Jamieson said.

“Councils will continue to work with the federal government to ensure extra funding flows in future years so the economic sustainability of councils and their communities is maintained.”

First step to recovery

LGNSW said the cash injection was the first step on the road to a locally led recovery.

“This funding will help keep local economies from collapse by keeping the tens of thousands of people who make up our invaluable local government workforce in jobs,” president Linda Scott said.

Cr Scott welcomed the advance payment of the year’s second instalment of FAGS  but noted the grant amount had not been increased.

So while the cash flow would help keep councils liquid, it wouldn’t actually provide for any extra infrastructure, she said.

She said payment of an additional half-year instalment to councils, over and above Friday’s announcement, would provide an additional $400 million to NSW councils, and make a massive difference to the communities they represented.

WALGA said more than $70 million had been committed to the state and every West Australian local government would receive some funding.

Finally some help, says WA

WALGA President and ALGA Vice President Tracey Roberts said the state would see the injection of $73 million into local projects.

She said local government in WA had missed out on the financial support and support offered to other states.

“Consequently while the Federal funding package is a national initiative, it will be especially appreciated by WA Councils and their communities.”

LGAT President Christina Holmdahl said the announcement would lead to around $16 million for expenditure on local roads and community infrastructure in Tasmania and councils were  already working to identify suitable, ready projects that can be brought forward.

The bringing forward of Financial Assistance Grants (FAGs) payments would also provide benefit to councils that were are facing short term cash flow, she said.

The peak body for local government officers, Local Government Professionals Australia, welcomed the package, saying it would help councils deliver local jobs and local business.

“The stimulus will see priority local road and community infrastructure projects delivered through local governments creating new jobs and protecting businesses to help communities bounce back from the COVID-19 pandemic,” chief executive Clare Sullivan said.

‘Welcome but modest’

Labor described the program as ‘welcome but modest”.

Councils still had to seek approval from the Commonwealth before funding for projects can be delivered, infrastructure spokeswoman Catherine King and local government spokesman Jason Clare said in a joint statement.

“Additionally, the government must ensure that the money is distributed on a transparent and equitable basis, unlike some previous Coalition programs,” they said.

It comes after draft budgets and economic modelling showed that the double whammy of COVID-19 and bushfires was stretching councils to their limits.




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Hutchinson Builders takes over Cbus Brisbane tower that broke Probuild

Hutchinson Builders takes over Cbus Brisbane tower

Hutchinson Builders will take over the completion of Cbus Property’s troubled residential development in Brisbane, one of most problematic projects for failed construction contractor Probuild.

The awarding of the contract was widely expected, as family-owned Hutchies, the largest Queensland-based builder, was seen as the only contractor capable of taking on the 47-level project.

“Since commencing preliminary works on site three weeks ago, Cbus Property, together with Hutchinson Builders, continues to finalise subcontractor negotiations and prepare a revised construction programme,” Cbus Property chief executive Adrian Pozzo said on Monday.

“Once finalised, we will provide an update to purchasers with a more definitive completion timeline.”

Chairman Scott Hutchinson told The Australian Financial Review in early March he was “quietly hoping” to pick up the job and the announcement makes it second time lucky for the company that came second to Probuild in the 2017 race for the project.

Probuild had tendered a price for the project that was $40 million less than Hutchies’ price and a year faster to build, Mr Hutchinson said. Probuild has not confirmed those numbers, nor has Cbus Property.

But the project turned into such a drag for the business that Probuild parent WBHO said last year – long before putting the company into administration in February this year – that the project had racked up a $48 million loss.

Sydney-based Roberts Co has acquired Probuild’s Victorian projects and Built has taken over Dexus’ 25 Martin Place project in Sydney. The future of Greaton’s Ribbon project at Sydney’s Darling Harbour is still not clear.

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Gold Coast

Gold Coast’s New Isoletto Pool Club Brings A Slice Of Europe To Queensland


Over the past few years, The Star Gold Coast has been going hard on expansions as the property tries to firm up its status as the area’s most emblematic luxury address. Unlike in other Australian cities up and down the east coast, The Star Gold Coast has virtually no competition in sight, leaving it as somewhat of an incubator for the coastal city’s more premium offerings across dining and accommodation. The latest opening to help fortify that kind of reputation is Isoletto Pool Club, a ritzy sixth-floor bar and events space that’s part of the new Leisure Deck within its recently built 53-storey hotel and apartment tower.

Given the Ibizia-style Cali Beach has been such a hit for Gold Coast locals and visitors, it’d be no surprise to see Isoletto Pool Club take off as the destination pushes into its post-pandemic groove. And while Australia’s east coast is most likely heading towards its wetter months (yes – even Sydney), the opening still comes nicely timed to capitalise on all the return domestic travellers looking for something a bit more premium than the typical Broadbeach haunt.

The suite of poolside spaces that make up Isoletto aren’t breaking the mould when it comes to some of the more popular pool clubs from around the world, but the clean organic neutral palette looks incredibly inviting with its bright accents of lemon and melon. Consider it one of the few slices of European inspired spaces nudging its way into the famously outdated spread of average cafes and generic restaurants (Social Eating House being an exception) that have held Broadbeach back for years.

gold-coast pool club

The catch here is that Isoletto Pool Club will remain exclusive to all hotel guests within The Star’s numerous hotels, which span The Star Grand, The Darling, and newer developments Dorsett Gold Coast and The Star Residences. This includes anyone staying in the long-term rentals and permanent residences that make up The Star’s new apartment tower, which is opening in June this year.

There’s no subversion here. A press release for Isoletto Pool Club touts “island-inspired cocktails” and an extensive wine list, plus the kind of food menu that’s perfectly aligned with the coastal inspiration. Think casual Gold Coast staples like freshly rolled sushi and locally sourced oysters to fried snapper burgers and various acai bowls. Groups can also grab various poolside packages that include bottles of Champagne, cocktail selections, seasonal fruit platters, and some complimentary sunscreen.

The opening will be complemented by a separate Isoletto Privé, which is a dedicated event space signalled by a sprawling lawn and its own deck and terrace. And it seems The Star is really pushing this part of Isoletto, bolstering the property’s business and events portfolio with enough capacity to fit a comfortable 168 guests at long tables, 150 guests at seated banquet tables or a max of 1,200 standing guests if considering the entire Leisure Deck as well.

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Homebuyers Warned as Builders Renegotiate Contracts

homebuyers feature image

The Queensland Building and Construction Commission has warned homebuyers to seek legal advice before agreeing to make payments that fall outside of the terms of fixed price contracts.

QBCC’s warning comes as builders and construction firms face escalating construction and labour costs and delays.

Earlier this week, it was revealed Oracle Homes was asking homebuyers for up to $122,000 for price variations due to cost blowouts.

Master Builders Australia acting chief executive Paul Bidwell said the ongoing war in the Ukraine was also affecting supplies.

“We’ve just seen, as a result of the Ukrainian conflict, the federal government impose tariffs on goods coming out of that region and the immediate impact has been a 25 per cent increase on engineered wood products,” Bidwell said.

“So that will add $6000 to $11,000 depending on how big the house is.

“Who would have figured that that would have happened, two months ago?”

After high-profile builders Probuild and Condev declared insolvency, a number of smaller subcontractors, builders and construction firms are barely managing to stay afloat.

“What Oracle is going through is no different to what any other builder in Australia is going through,” Bidwell said.

“They have signed a fixed price contract and in the period of that contract, the cost of materials and labour has gone up astronomically.”

Cost variations can be accounted for via rise and fall or cost escalation clauses in contracts but when and how these can be introduced into contracts varies from state to state.

With a fixed price contract the homebuyer is not required to pay any more than what was initially agreed to in the contract but it does not prevent the buyer from contacting the homebuyer to negotiate.

Bidwell said it was key to keep the homebuyer informed and to try to negotiate.

“There is nothing to stop the builder going to their clients and saying ‘here is the problem I have got. I can’t finish it by this time, it’s going to cost more, here are my invoices so you can see the costs’,” Bidwell said.

“It’s all about managing relationships.

“The builder has to manage the relationship with the client so there are no surprises.”

homebuyers 1

▲ Metricon is renegotiating some contracts.

Metricon’s chief executive Mariao Biasin recently announced that it was renegotiating contracts with some clients.

“Metricon is committed to fulfilling every valid contract in which a fixed price has been agreed,” Biasin said.

Last financial year, Oracle Homes built 112 houses worth $36.6 million, a drop of nearly two thirds compared to the previous financial year when it built 318 houses worth more than $90 million.

It has a category 6 licence allowing it to build up to $240-million worth of housing per year.

Bidwell said there seemed to be no short-term solutions.

“We do need to do more planting with forestry and more domestic production and manufacturing,” Bidwell said.

“But it won’t fix the problem in the short term.

“It’s very difficult—there’s not much that can be done.”

Monash University Professor Gerber told media this week that if a builder went bankrupt it would affect every one.

“When things start to go wrong for the builder, it really has a domino effect because all the people they are responsible for paying — their workers, their suppliers, their tradies — they all suffer and can’t be paid,” Gerber said.


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