Brick shortage prompts $4 million sweetener to get factory reopened

Western Australian taxpayers will fork out up to $4 million to restart a second brick making facility in the state as the construction industry continues to grapple with labour and raw material shortages.

The state was left with just one brickmaker when Austral closed its Cardup brickworks in mid-2023.

Since then, the government says the number of detached homes starting construction has grown by more than 50 per cent, leaving the remaining manufacturer — Midland Brick — struggling to keep up with demand.

In an effort to address the shortfall, the state government will now give $3 million to Austral to re-open its facility, which is expected to increase production by up to 15 per cent.

"This is making sure we do everything possible to continue the momentum of building more homes and also reducing the challenges of increased costs [of] bricks," Treasurer Rita Saffioti said.

Asked why state money was required to kickstart the project given the high demand, Ms Saffioti said the government was supporting industries in critical sectors "to get on with it".

"It's as simple as that. We can't have a situation where we know we need to build more houses but simply we don't have the bricks,"

she said.

Labour supply also critical

Industry executives who attended the funding announcement, made at a construction site in the Perth suburb of Sinagra, were unanimous in their support.

"Still not enough, so we've still got an issue, but it's certainly a large help," ABN Group managing director Dale Alcock said.

The industry veteran said the company, one of the state's largest homebuilders, had around 100 sites waiting on bricks. He urged the government to look into other ways to increase supply.

Mr Alcock said an "allocation system" used by Midland Brick showed there was "not enough [bricks] currently to go around".

“At the moment, the industry is more concerned about availability than cost,” Mr Alcock said.

"Cost is critical, but without bricks we get no production."

Master Builders WA CEO, Matt Moran, said having a large enough workforce was also critical to the industry's future.

"We need to double down and invest in trades. We need to promote trades more, attract people to apprenticeships," he said.

No quick fix

The government is offering Austral an extra $500,000 if it can resume operations by March.

The company will also get another $500,000 incentive if it produces at least 17 million bricks in its first year.

However, Housing Industry Association WA CEO, Michael McGowan, warned home owners that this would not provide a quick fix to the delays plaguing the industry, and urged people to be patient over the next 12 months

"There is going to be a little bit more time before these bricks become available, and the brick layers and the builders are working really hard to deliver the homes that are currently in the pipeline," he said.

Ms Saffioti said the government was still negotiating terms with Austral, including whether the company would be required to keep their facility open for a minimum period.

Mr McGowan said he doubted the company would be lacking in business over the next few years.

"The home building industry is going to be incredibly busy for the next three to four years, and certainly we would encourage this to be a long-term play," he said.