The source of contamination is believed to be timber waste from construction and demolition sites that was turned into mulch. So far, 60 locations in Sydney and 12 in Melbourne have been identified as contaminated with asbestos to various degrees. The numbers could increase as investigations continue.
Are such programs enough to ensure the supply of construction materials is sustainable? No, and if you look back at the examples of the past two centuries, industry-wide reuse of such materials should have been business as usual by now.
In such cases there is a legitimate – and necessary – role for governments to intervene and correct the market failure. For an externality such as carbon emissions (imposing costs on future generations) the market-based solution favoured by most economists is a carbon price.