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Event: Federal Election campaign launch; Sydney
Date: 28 February 2025, 10:30am AEDT
Speakers: Denita Wawn, CEO Master Builders Australia; Joey & Alice Pamment, Pamment Projects; Matthew Moneghittie, Moneghittie Built; Louie Abboud, iBuild&Co; Robert Faraj, Pioneer Building Group
Topics: Federal Election; housing crisis; More Homes for Aussies
E&OE
Denita Wawn, CEO Master Builders Australia: Good to go everyone? Thank you so much. Denita Wawn, CEO Master Builders Australia. We have a housing crisis in this country. It’s been decades in the making, and we’ve had all levels of government do a lot of talking, but not a hell of a lot of action, to be honest. We’ve had situations where positive changes have been made, but equally bad changes neutralise those positive ones, and we’re actually going backwards because of a piecemeal approach that is being taken by governments. So today, Master Builders Australia is launching a Federal Election campaign: More Homes for Aussies. Because Aussies deserve to have homes, whether it’s social housing, affordable housing, rental housing and owner occupier housing. It is critical that we get our supply levers right and we get reinvestment back into our industry. We need to ensure that the next federal government takes a holistic approach to resolving the housing crisis. Because it’s not just the builders around Australia, including those behind me, but it’s also because 70 per cent of Australians think it’s the responsibility of the federal government to resolve the housing crisis. So how do we fix this problem? The solutions are well known, but it is needing the political will of politicians to implement them on a holistic approach. That includes a strong economy. It includes concrete supply initiatives to resolve those barriers that are restricting supply for all homes, regardless of the circumstances upon which people find themselves. It means we need to stop strangling businesses on unnecessary industrial relations changes. It means we need to ensure that building regulations are practical and cost effective, again, instead of actually driving costs up for no particular reason. We need to ensure that there is critical enabling infrastructure funding to ensure that land is travel ready and we have that social infrastructure that our communities deserve. We also need to ensure that people who are bad players in the industry are held to account, whoever they may be. So today, Master Builders Australia says, if we are going to aim for more homes for Aussies, then the federal government and all federal politicians need to stand up. We will be looking through this federal campaign period at every single policy that has been released by all the parties, assessing it and making public statements to ensure that all Australians, when they are grappling with the cost of living and a housing crisis, are fully aware. By the time they vote they are cognisant of which party is going to do the best for them when it comes to more homes for Aussies. Thank you. I’d now like to invite a number of our builders to say a few words about what is happening on the front line. And please, first of all, Joe and Alice Pamment to say a few words.
Joey Pamment, Pamment Projects: Joey Pamment, Pamment Projects. We’ve had such a shortage of qualified trades in the industry. The guys that come on site, some of them are unskilled. We need more training in the industry, we need more training for men and women along in the areas where the skill shortage is: tiling, electricians, plumbers, because we have to pay extra for the correct subcontractor to get them on board. You pay a premium for the good guys, because a lot of the guys the are there, aren’t skilled in the right task of doing the project, doing the job.
Alice Pamment, Pamment Projects: Hi, I’m Alice from Pamment Projects. This problem we feel is a double-edged sword. Homeowners are spending sometimes two, up to two years in design and planning stages. Their life savings, they’ve bought on a home. They want to renovate it or do something else with it, and they’re coming to us to price it, eventually. We’re pricing 30 – 40 per cent more than we have in the last few years. They can’t even go ahead, so we’re wasting our time, hundreds of hours a year in our team, constantly estimating jobs that won’t even go ahead. And that’s happening over and over again, more than we’ve ever seen before. And it’s just it’s hard for them and it’s hard for us, so I don’t know, just something has to change.
Denita: Thanks guys. Matthew.
Matthew Moneghittie, Moneghittie Built: Matt Moneghittie, Moneghittie Built. I’d like to shed some light on apprentices and training them up and the cost of an apprentice versus a tradesman. An apprentice can be charged out from $55 – $60 upwards, and a tradesman, $85. So, if you’ve got a fixed price project as the building, you’re going to want to complete that as fast as you can for the client’s sake and your own. Why would you put an apprentice on that’s going to have half the productivity of a fully qualified tradesman? So how do we, a) get more apprentices in, and how do we get the federal government to provide more funding to put these guys through and lower their actual costs?
Denita: Louie.
Louie Abboud, iBuild&Co: Louie Abboud, iBuild&Co. Speaking, from experience, we’re a small boutique building company. I find the struggles at the moment with the clients getting their application through to council. It’s a whole process. It’s costly, which then stalls them proceeding with our quote. They’re putting our quotes on hold, then coming back to it in a year’s time and asking us if we can warrant that quote. Unfortunately, we can’t. Costs are escalating, so we have to change our costs. It goes up and nine times out of 10 you end up not going through with the job. Clients can’t afford it. So I think somewhere along the lines there, the government needs to work out how they’re going to fix the council costs.
Denita: Absolutely. Finally, Rob.
Robert Faraj, Pioneer Building Group: Hello, Rob Faraj here from Pioneer Building Group. What I’d like to shed light on is banks, their lending criteria, very difficult. I know a lot of people who have a bit of savings, who are willing to execute and perhaps start building, but then the costs of construction is another deterrent, and then the process, how long it takes, and we’re forever quoting and pricing, and we don’t even, half of them, we don’t even win on the back end, and something needs to change. It’s the length of through councils and DAs, and even through CDC [Complying Development Certificate], that’s a grey area. A lot of people know the rules, don’t know the rules, and we’re getting more education down that component. And also through DAs, that’s taking a year, a year and a half sometimes, and then banks releasing funds, and then with these interest rates going up and then coming back down again, a lot of people are afraid. Something needs to change and change quickly, because in a few years, we’re going to feel the pressure of all that backlogging, not going to get all those homes built. Thank you.
Denita: Any questions?
Journalist: Yeah, look,Denita, just to begin with on building regulations. What would you say are the biggest problems around the red tape and the cost of building regulations?
Denita: The problem with building regulations is the compounding impact from the time you look at land being available, the enabling infrastructure, the time a development application is approved. You then finally get to the stage where you’re contemplating building. You then have the time delays around building approvals. Then of course, you’ve got the National Construction Code that is ridiculously complex in many instances. It’s actually contradictory in components of it. And every time that we put in new regulations in a very quick manner, without understanding the practical impacts, we have significant cost escalations, which have occurred over the last few years. And then, of course, you’ve finally got to get a building occupancy certificate, which again, can be time consuming. That is, of course, if you don’t have, of course, any legal challenges to what you’re trying to build in the first place. So there is a compounding impact to building regulation. It means we’re seeing time blowouts where a detached home used to take about six months to build, it now takes over 12 months to build. High rise developments used to take about two years. Now they’re taking at least three years. That’s just the construction component that doesn’t even take into account the delays that we’re seeing in getting it to construction phase.
Journalist: Alice mentioned about the costs moving up like 30 to 40 per cent. Just walk me through why? Like, what are the contributing factors there in the cost blowouts?
Denita: Unfortunately, we’ve seen in building construction an increase by 40% over the last five years just in construction costs alone. And there’s a number of components to that. One is building materials. A large component is labour costs, and the final component is building regulations, and the time lost because of those compounding building regulation problems. So we’ve seen a 40 per cent increase in costs. On top of that, we’ve also seen a 20 per cent reduction in productivity of this sector over the last 10 years. So that is why it’s taking us so long to get anything built. People are not wanting to invest because those costs are high, and with a decline in productivity, it’s exacerbated those costs, and therefore we’ve seen an unrealised demand in people wanting to build homes. We know the demand is there, but people are not willing to invest. They’re not willing to put in their life savings, because they’re concerned that the costs are too high, and that means we’ve got to focus on those supply constraints. Demand is there. We have demand. We’ve now got to resolve supply to reduce the costs and re-establish investment back into the industry.
Journalist: Not sure how across this you are but this morning, the state government announced 18 sites that will be fast tracked under the Housing Delivery Authority. They’re state significant sites. Essentially, the government wants to get building within 12 months, once all the approvals and processes are put in place. Do you really see that being possible? I mean, everything that we’ve just been talking about, is that a possibility?
Denita: Well, it’s great that the New South Wales State Government has got an ambition for a quick fast track approvals, but as the builders behind me would say, that is highly unlikely unless significant change happens throughout both local government and state government. Politicians have great intent, but what happens then we get involved in the quagmire of the bureaucrats and the quagmire of law, and with people then appealing and so forth, development applications, building applications. So there needs to be a significant change to laws in the first place, rather than hoping that fast track will work without looking at the underlying problems in the first place. And that’s what we’re talking about. The intent is there, but unless you actually resolve the fundamental issues of why we’re getting stuck in the legal binds before we can even start building, then we’ll be on a track to nowhere.
Journalist: And also like being able to slash costs, right? Because if it’s too expensive to build, how on earth will we be able to get moving?
Denita: We’re seeing developers at the moment, actually want to build, but they can’t get the numbers to stack up. They can’t get the returns on their investment. We know that they can get clients into a high rise development, for example. But again, it is too costly to build. So until those costs start decreasing and you can actually get a return for investment, there is going to be a concern by investors to actually get back into the market, and that’s what we need to resolve. We need to ensure that we’re giving certainty to investment, that we’re driving those costs down, and the only way we’re going to do that is to resolve these building regulations and red tape, that we’re going to resolve the skill shortage, and we’re also going to ensure that business owners are not strangle hold because at the moment, they’re probably spending half their time on administration, as opposed to actually what they should be doing, and that is building more homes for Aussies.
Media contact:
Dee Zegarac
National Director, Media & Public Affairs
0400 493 071
dee.zegarac@masterbuilders.com.au