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Builders to feel the pain

THE building industry has warned the federal government's carbon tax will put further pressure on housing affordability by driving up the cost of building materials.

THE building industry has warned the federal government's carbon tax will put further pressure on housing affordability by driving up the cost of building materials.

Brickworks, the country's largest brickmaker, said the $23 per tonne carbon tax would cost the company $12.8 million in earnings before interest and tax.

It said it would try to fully recover those costs through product price increases of up to 6 per cent, but that it was also concerned the tax would lead to reduced building activity.

CSR said it also expected to increase prices in its range of plasterboard, bricks, roof tiles and fibre cement products to recover costs.

Housing Industry Association chief executive Graham Wolfe said this would have "painful and widespread repercussions" for prospective home owners.

"Housing affordability is already at a distressing level [and] new housing supply is well below underlying demand," Mr Wolfe said. "Families buying a new home will now face additional building costs and higher mortgage repayments."

Cement producer Adelaide Brighton said it would consider importing more of its material from offshore after revealing the tax could slash its net profit by about $5 million next year.

"The Australian dollar along with the carbon tax will just make us look at those options even closer," chief executive Mark Chellew said.

While heavy-polluting companies operating in the steel, cement and glass industries will all be significantly compensated under the transitional assistance provided in the carbon pricing scheme, brick makers will miss out because their industry is not trade-exposed.

Brickworks chief executive Lindsay Partridge has long argued it has been unfairly treated given it has voluntarily reduced its carbon emissions by 40 per cent through the closure of old and inefficient brick plants and investing in new energy-efficient plants. Boral has also mothballed some brick plants in Queensland.

But proponents of the government's scheme argue the tax is doing its job by forcing such changes in behaviour of the country's largest building material companies.

As the emphasis on sustainability grows, the likes of James Hardie and CSR have been pushing their fibre cement range to builders as an energy-efficient alternative.


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