1 00:00:00,120 --> 00:00:02,239 Speaker 1: We have had a number of contractors in the building 2 00:00:02,240 --> 00:00:06,000 Speaker 1: industry getting contact with concerns that defense spending in the 3 00:00:06,040 --> 00:00:09,959 Speaker 1: Northern Territory is delayed or no longer happening now. One 4 00:00:10,000 --> 00:00:12,480 Speaker 1: person had said that two hundred and fifty million dollars 5 00:00:12,480 --> 00:00:15,200 Speaker 1: of funding had either been pulled or that it was 6 00:00:15,400 --> 00:00:21,159 Speaker 1: unlikely to happen until a defense review is completed. So, 7 00:00:21,320 --> 00:00:24,079 Speaker 1: like I said, some quite concerned about the period of 8 00:00:24,079 --> 00:00:25,920 Speaker 1: time that this is going to be delayed and what 9 00:00:25,960 --> 00:00:29,160 Speaker 1: it means for those that have got contracts. Now. Joining 10 00:00:29,160 --> 00:00:31,200 Speaker 1: me in the studio to talk more about this is 11 00:00:31,240 --> 00:00:34,279 Speaker 1: the CEO of Master Builders here in the Northern Territory, 12 00:00:34,520 --> 00:00:35,040 Speaker 1: Ben Carter. 13 00:00:35,159 --> 00:00:37,200 Speaker 2: Good morning to you, Ben Okatie. How are you going? 14 00:00:37,320 --> 00:00:40,120 Speaker 1: Yeah, really good, Thanks so much for your time, Ben. 15 00:00:40,200 --> 00:00:43,280 Speaker 1: What is the situation. Has the defense spend in the 16 00:00:43,320 --> 00:00:45,559 Speaker 1: Northern Territory been seriously delayed? 17 00:00:46,080 --> 00:00:51,280 Speaker 3: There is a delay, and we are working very hard 18 00:00:51,320 --> 00:00:53,199 Speaker 3: with defense right now, so try and get some more 19 00:00:53,200 --> 00:00:55,640 Speaker 3: clarity and also get us some solutions. The problem seems 20 00:00:55,680 --> 00:00:58,920 Speaker 3: to be there's a confluence of factors. There's the Defense 21 00:00:58,920 --> 00:01:02,400 Speaker 3: Strategic Review, as you've mentioned, which has created a little 22 00:01:02,400 --> 00:01:04,920 Speaker 3: bit of uncertainty because that's not clear yet what the 23 00:01:04,959 --> 00:01:05,840 Speaker 3: government's going to do. 24 00:01:05,920 --> 00:01:07,279 Speaker 2: However, that's not the main factor. 25 00:01:07,440 --> 00:01:11,400 Speaker 3: Master builders and most of our stakeholders are fairly confident 26 00:01:11,480 --> 00:01:13,960 Speaker 3: that certainly there won't mean any less work and in 27 00:01:13,959 --> 00:01:17,200 Speaker 3: fact could mean some enhanced work in the next few 28 00:01:17,280 --> 00:01:18,279 Speaker 3: years as. 29 00:01:18,120 --> 00:01:20,240 Speaker 2: A result of that review. So that's really good news. 30 00:01:20,560 --> 00:01:23,480 Speaker 3: However, the main trouble seems to be that in the 31 00:01:23,480 --> 00:01:25,840 Speaker 3: Defense and a Security of State works. In other words, 32 00:01:25,880 --> 00:01:28,360 Speaker 3: a lot of the projects that smaller contractors are working 33 00:01:28,360 --> 00:01:31,000 Speaker 3: on in and around Darwin as opposed to the projects 34 00:01:31,560 --> 00:01:34,400 Speaker 3: have been delayed, and that's a pretty that's a real 35 00:01:34,440 --> 00:01:38,240 Speaker 3: problem because we want really people from the territory and 36 00:01:38,440 --> 00:01:42,720 Speaker 3: territories to really understand every day just how important this 37 00:01:42,800 --> 00:01:45,720 Speaker 3: is for their economy as opposed to the rest of Australia. 38 00:01:46,160 --> 00:01:50,280 Speaker 3: The defense expenditurey is a huge, massive part of our economy. 39 00:01:50,480 --> 00:01:53,680 Speaker 3: When people go to the supermarket shelves, they need to 40 00:01:53,760 --> 00:01:57,480 Speaker 3: understand that so many people in Darwen and the territory 41 00:01:57,520 --> 00:02:00,600 Speaker 3: more broadly are really dependent upon this one million dollars 42 00:02:00,880 --> 00:02:02,960 Speaker 3: on average a year that's been pumped into our comedy 43 00:02:03,000 --> 00:02:05,320 Speaker 3: by defense, and so this delay is going to be 44 00:02:05,360 --> 00:02:08,120 Speaker 3: really problematic. Now the work is going to be done. 45 00:02:08,600 --> 00:02:13,000 Speaker 3: There's no signal from Defense whatsoever that it won't be done. 46 00:02:13,160 --> 00:02:15,640 Speaker 3: It's an issue of delay, yeah, and it's a pretty 47 00:02:15,720 --> 00:02:19,440 Speaker 3: random decision that we want Defense to understand because what 48 00:02:19,480 --> 00:02:22,080 Speaker 3: they've what they're doing is they're doing this internal review 49 00:02:22,280 --> 00:02:24,720 Speaker 3: from what we can gather, which will cause this massive 50 00:02:24,720 --> 00:02:28,119 Speaker 3: delay of you know, some months, and for people who 51 00:02:28,120 --> 00:02:30,959 Speaker 3: are earning their living doing that, that's going to be 52 00:02:30,960 --> 00:02:34,680 Speaker 3: a real problem. So many contractors in Darwin and around 53 00:02:34,680 --> 00:02:36,840 Speaker 3: a territory of geared up to work on defense projects 54 00:02:37,320 --> 00:02:41,480 Speaker 3: and they've invested in their businesses and for a delayed 55 00:02:41,520 --> 00:02:45,160 Speaker 3: occur just because Defense is doing an internal review and 56 00:02:45,200 --> 00:02:49,639 Speaker 3: restructure of how they'll deliver that work is a bit 57 00:02:50,200 --> 00:02:52,440 Speaker 3: bizarre and it's an example, I think of what we 58 00:02:52,480 --> 00:02:54,880 Speaker 3: need to make sure the Defense understands that real people 59 00:02:55,360 --> 00:02:59,400 Speaker 3: in real businesses actually are affected by their decisions and 60 00:02:59,480 --> 00:03:01,519 Speaker 3: what might seem like a good idea on paper in 61 00:03:01,600 --> 00:03:05,280 Speaker 3: Canberra affects real people at day to day in Darwin well. 62 00:03:05,280 --> 00:03:07,799 Speaker 1: And it's something that I know Master Builders have worked 63 00:03:07,840 --> 00:03:11,359 Speaker 1: so hard on previously to make sure that local contractors 64 00:03:11,400 --> 00:03:14,800 Speaker 1: were actually winning those contracts as well, you know, from 65 00:03:14,840 --> 00:03:18,080 Speaker 1: those from those larger companies that are obviously winning the 66 00:03:18,160 --> 00:03:21,359 Speaker 1: higher tier of the contracts to begin with, but that's 67 00:03:21,639 --> 00:03:24,400 Speaker 1: you know, the other jobs are subcontracted to local business, 68 00:03:25,160 --> 00:03:27,640 Speaker 1: so it's something that had been worked so hard on. 69 00:03:27,720 --> 00:03:31,480 Speaker 1: So those delays realistically, like if you are a contractor 70 00:03:31,520 --> 00:03:33,840 Speaker 1: that's thinking that you're going to do some work let's say, 71 00:03:34,040 --> 00:03:38,000 Speaker 1: you know, as an example, at Tindall and and now 72 00:03:38,040 --> 00:03:40,360 Speaker 1: you're unsure of the period of time that that delay 73 00:03:40,400 --> 00:03:41,880 Speaker 1: is going to hold out for. 74 00:03:42,040 --> 00:03:43,880 Speaker 2: What does it mean today? Oh, I'm not sure that 75 00:03:43,960 --> 00:03:45,760 Speaker 2: Tindall is the real problem, but it will be. 76 00:03:45,920 --> 00:03:49,000 Speaker 3: It'll be again, and it will depend a little bit 77 00:03:49,000 --> 00:03:51,040 Speaker 3: on what work you're already doing. But a lot of 78 00:03:51,080 --> 00:03:53,440 Speaker 3: this is around the defense of Security of State stuff, 79 00:03:53,480 --> 00:03:57,640 Speaker 3: so smaller bundles of work, you know, like fitouts and 80 00:03:58,400 --> 00:04:02,960 Speaker 3: other barracks, work on barracks and things like that. So 81 00:04:03,240 --> 00:04:05,560 Speaker 3: it's a little bit unclear, but that said, what seems 82 00:04:05,560 --> 00:04:06,840 Speaker 3: to be the message is that that's going to be 83 00:04:06,880 --> 00:04:09,760 Speaker 3: the main focus of the delay, and that's a real 84 00:04:09,800 --> 00:04:12,160 Speaker 3: problem for our contractors, which is why we're working so 85 00:04:12,280 --> 00:04:15,680 Speaker 3: hard in the next well now and and continuing to 86 00:04:15,680 --> 00:04:18,200 Speaker 3: do that to get some to talk to the federal 87 00:04:18,200 --> 00:04:20,760 Speaker 3: government and the Defense and also the NT government about 88 00:04:20,800 --> 00:04:23,600 Speaker 3: what we can do to to see people through because 89 00:04:24,520 --> 00:04:27,320 Speaker 3: and also to to try and I guess ameliorate that 90 00:04:27,360 --> 00:04:32,400 Speaker 3: decision because there's there's it's an internal defense process that's 91 00:04:32,440 --> 00:04:35,520 Speaker 3: going to result in in this delay. It's not because 92 00:04:35,560 --> 00:04:38,200 Speaker 3: the work's not going to be done. Even Defense is 93 00:04:38,200 --> 00:04:39,480 Speaker 3: clear the fact that it's going to be done. And 94 00:04:39,520 --> 00:04:41,200 Speaker 3: then we need to send that signal to our members 95 00:04:41,200 --> 00:04:43,039 Speaker 3: and to the into the into the industry that it 96 00:04:43,040 --> 00:04:46,000 Speaker 3: will be done. The work will be done. And as 97 00:04:46,040 --> 00:04:49,680 Speaker 3: I said, it's it's likely under the DSR that after 98 00:04:49,720 --> 00:04:51,680 Speaker 3: the DSR, the Defense Tragic Review, that there will be 99 00:04:51,720 --> 00:04:56,520 Speaker 3: an enhanced pipeline of work of some of some dimension. However, 100 00:04:57,000 --> 00:05:01,279 Speaker 3: we need to know what's going to happen now in 101 00:05:01,320 --> 00:05:03,719 Speaker 3: the next few months. We don't know exactly. Some people 102 00:05:03,720 --> 00:05:05,960 Speaker 3: are playing saying six months, some people are saying twelve months. 103 00:05:05,960 --> 00:05:07,599 Speaker 3: We don't think it will be twelve months. We find 104 00:05:07,640 --> 00:05:09,000 Speaker 3: it hard to believe it they will be able to 105 00:05:09,040 --> 00:05:13,240 Speaker 3: turn a tap off for that long. Nevertheless, this is 106 00:05:13,279 --> 00:05:17,880 Speaker 3: again another example of Defense need to understand that decisions 107 00:05:17,960 --> 00:05:21,120 Speaker 3: made around processes like this have a real impact on 108 00:05:21,160 --> 00:05:23,400 Speaker 3: the ground, for real businesses. And the problem will be 109 00:05:23,480 --> 00:05:27,200 Speaker 3: also is that once this review, once they're the internal 110 00:05:27,480 --> 00:05:30,840 Speaker 3: processing review is completed, then there will be in an 111 00:05:30,880 --> 00:05:32,960 Speaker 3: avalanche of work again. 112 00:05:32,720 --> 00:05:35,120 Speaker 1: And then you've got to make sure that you're. 113 00:05:34,480 --> 00:05:35,640 Speaker 2: Able to ramp up and cope with it. 114 00:05:35,760 --> 00:05:38,119 Speaker 1: Then what a contract is saying to you right now 115 00:05:38,240 --> 00:05:40,560 Speaker 1: about these delays. 116 00:05:40,320 --> 00:05:41,640 Speaker 2: Well, there's a number of angers. 117 00:05:41,839 --> 00:05:44,440 Speaker 3: I think what part of this is again is anxiety 118 00:05:44,480 --> 00:05:47,800 Speaker 3: feeding in because people are aware of the Defense Strategic Review. 119 00:05:48,320 --> 00:05:50,080 Speaker 3: There's a lot of talk about it in the media 120 00:05:50,120 --> 00:05:54,479 Speaker 3: and nationally and among politicians. People are concerned, they don't 121 00:05:54,520 --> 00:05:57,040 Speaker 3: know what's going to happen. And we were certainly urging 122 00:05:57,080 --> 00:06:01,120 Speaker 3: the federal Defense minister ministers to release, say public version 123 00:06:01,160 --> 00:06:04,880 Speaker 3: of their review because they need to send some signals 124 00:06:04,880 --> 00:06:08,720 Speaker 3: to industry and to the community so that they understand 125 00:06:09,680 --> 00:06:13,160 Speaker 3: what's going to happen in abroad. We of course defenses 126 00:06:13,200 --> 00:06:14,800 Speaker 3: in charge of fighting wars, and we don't need to 127 00:06:14,800 --> 00:06:17,520 Speaker 3: know about all the different intricacies of their decisions. And 128 00:06:17,800 --> 00:06:20,360 Speaker 3: likewise the federal government, but the federal budget will can 129 00:06:20,440 --> 00:06:22,960 Speaker 3: be coming up, there'll be some strong signals about spending 130 00:06:23,000 --> 00:06:25,400 Speaker 3: in that and but we want the federal government to 131 00:06:25,520 --> 00:06:27,599 Speaker 3: prefer that to release a sort of a public version 132 00:06:27,600 --> 00:06:31,479 Speaker 3: of the of the DSR so that there's some signals, 133 00:06:31,560 --> 00:06:34,040 Speaker 3: if you like, about what will be coming forward and 134 00:06:34,080 --> 00:06:37,080 Speaker 3: in terms of what contractors are saying. There's anxiety around 135 00:06:37,120 --> 00:06:39,480 Speaker 3: that and also a lot of anxiety around this pause 136 00:06:39,800 --> 00:06:41,680 Speaker 3: because businesses, cash flows everything. 137 00:06:42,640 --> 00:06:44,480 Speaker 2: Businesses need to be able to sustain and be. 138 00:06:44,520 --> 00:06:48,760 Speaker 3: Resilient, and it's just you know, it would be very 139 00:06:48,839 --> 00:06:53,799 Speaker 3: unfortunate if there's a demand collapse that's foisted on us 140 00:06:53,880 --> 00:06:57,560 Speaker 3: just because Defense is doing a internal restructure of its 141 00:06:57,720 --> 00:07:03,440 Speaker 3: one process. We are strongly communicating to the federal government 142 00:07:03,560 --> 00:07:06,640 Speaker 3: to Defense that this is there needs to be there 143 00:07:06,640 --> 00:07:09,680 Speaker 3: needs to be a way to sustain the smaller contracts 144 00:07:09,680 --> 00:07:12,480 Speaker 3: in particular, which I think why this is going on. 145 00:07:12,640 --> 00:07:14,920 Speaker 1: Hey, just very quickly before I let you go, the 146 00:07:14,960 --> 00:07:18,120 Speaker 1: interest rate rises? What kind of impact is that having 147 00:07:18,160 --> 00:07:19,400 Speaker 1: on the industry right now? 148 00:07:20,080 --> 00:07:22,640 Speaker 3: Okay, do you interestrate rises are biding, There's no question 149 00:07:22,680 --> 00:07:25,840 Speaker 3: about that. However, we have to strongly, we have to 150 00:07:25,880 --> 00:07:29,960 Speaker 3: strongly understand that inflation is the problem. Flat The interest 151 00:07:30,000 --> 00:07:32,800 Speaker 3: rates are rising because of the inflation, which is which 152 00:07:32,840 --> 00:07:35,160 Speaker 3: is the federal government tells us reached the peak of 153 00:07:35,200 --> 00:07:38,480 Speaker 3: seven point eight percent last year. However, you can tell 154 00:07:38,520 --> 00:07:41,400 Speaker 3: the federal government is very concerned that inflation is not 155 00:07:41,480 --> 00:07:44,400 Speaker 3: going down enough. That's the key issue, and that's why 156 00:07:45,280 --> 00:07:48,160 Speaker 3: the rate rises are going up. So while we're concerned 157 00:07:48,200 --> 00:07:51,600 Speaker 3: that rate rises are having an impact, inflation is a 158 00:07:51,600 --> 00:07:55,520 Speaker 3: capacity killer. Inflation is an economy killer, and an inflation 159 00:07:55,680 --> 00:07:57,520 Speaker 3: is a capacity killer, and if we don't get inflastioned 160 00:07:57,600 --> 00:08:00,640 Speaker 3: under control, then things will be a lot worse than 161 00:08:00,760 --> 00:08:03,160 Speaker 3: higher interest rates. And one of the things we want 162 00:08:03,200 --> 00:08:05,080 Speaker 3: to see from the federal government is that they work 163 00:08:05,120 --> 00:08:07,880 Speaker 3: closely with the Reserve Bank so they're not at odds 164 00:08:07,920 --> 00:08:11,320 Speaker 3: in their policy decisions. So the federal government should, for instance, 165 00:08:11,440 --> 00:08:13,760 Speaker 3: not be making policy decisions that put money into the 166 00:08:13,760 --> 00:08:16,880 Speaker 3: economy and an inflationary impact while that while the Reserve 167 00:08:16,920 --> 00:08:20,400 Speaker 3: Bank is trying to have trying to find an incredibly 168 00:08:20,920 --> 00:08:25,400 Speaker 3: narrow glide path to a soft landing. So this is 169 00:08:25,400 --> 00:08:27,720 Speaker 3: an issue that did the federal government, and we would 170 00:08:27,720 --> 00:08:30,120 Speaker 3: hope that you know that our federal representatives in Darwena 171 00:08:30,640 --> 00:08:34,400 Speaker 3: and in the territory of communicating this that they need 172 00:08:34,440 --> 00:08:36,679 Speaker 3: to work with the federal with the Reserve Bank and 173 00:08:36,720 --> 00:08:38,080 Speaker 3: not work at odds with each other. 174 00:08:38,679 --> 00:08:41,600 Speaker 1: Well Ben Carter, the CEO of master Builders here in 175 00:08:41,600 --> 00:08:43,480 Speaker 1: the Northern Territory, We will have to leave it there. 176 00:08:43,480 --> 00:08:45,199 Speaker 1: Thank you, as always for your time this morning.