Interview with ABC News Breakfast

Event: Interview with ABC News Breakfast

Date: 25 March 2026, 6.30am AEDT
Speakers: Denita Wawn, CEO Master Builders Australia

Topics: Fuel supply, supply chain concerns, Middle Eastern conflict impacts on builders, Capital Gains Tax Discount, skilled migration, regulation reduction, domestic apprenticeship reform.

E&OE

Host: Now, growing supply chain issues and rising costs linked to the Middle East war have prompted urgent talks between the Government and the construction sector. To tell us more about what happened in those talks, we’re joined by Master Builders Chief Executive Denita Wawn. Denita, welcome to the News Breakfast Couch.

Denita Wawn, CEO Master Builders Australia: Good morning.

Host: So, I think the first question people are going to have is, what sort of surcharge are builders facing at the moment when they get stuff delivered to site?

Denita: Well, the biggest issue, of course, is that diesel cost, and we’re seeing surcharges constantly rising each week. At the moment, it’s sitting around anywhere between eight to 10 per cent over and above what they’ve been paying on freight transport. That, of course, is being assessed every week by suppliers. So, when you’re getting a deluge of increases by deliveries, we’re so incredibly reliant on those deliveries day in, day out, that is having some price escalations, and of course, it’s difficult for the civil contractors as well. They are reliant so heavily on diesel when it comes to making our land build ready as well.

Host: So, what are some of the issues in terms of cost are they having? Are they able to wear it? Are they able to pass it on? Because I’m sure there’d be fixed contracts with a lot of building projects.

Denita: That’s right. Unfortunately, the vast majority of building in this country is under fixed price contracts that have very limited, if none, rise and fall provisions and so, the builder has to wear those costs. We saw that in COVID and so builders have taken some more conservative approaches, we understand, but we did not appreciate the escalations that we’ve seen so rapidly over the last few weeks.

Host: Had a few people on the show say, “oh, this reminds us of COVID”, But I guess one big difference from COVID is that interest rates are now much higher. There’s not government support programs for jobs as well. Does that put extra pressure on builders? I imagine just their margins must be being squeezed in a way that they weren’t before. Previously in COVID, at least they could have said, well, that’s more debt, but a debt is at least cheap.

Denita: Yeah. Unfortunately, we’ve still got a very, very low margin industry and the interesting thing about this particular circumstance is that we had delays in supply and we had price hikes. But what we’re seeing from this is that many of our products are using petrochemical materials, and so that’s an extra layer of complexity that we’re currently working through, and it’s good that the Government has faced this and we’ve had meetings much earlier. We’ve learned a lot from COVID and using that learnings to ensure that we can minimise the disruption to the supply chains.

Host: Let’s talk about the meetings that took place yesterday. What was discussed? What are you hoping for out of them?

Denita: I think first and foremost, it was a great sharing opportunity to understand from all of the different parts of the supply chain, right through from those who are providing raw materials, through to the manufacturers, through to the end users, and so we’re able to share information. It’s critical they’ll get the right information so panic doesn’t set in. The Government really heard what the issues were, such as things like fixed price contracting, what that means if the worst-case scenario plays out. I think it’s very important to listeners to understand and that we are not in panic situation yet. We’re just preparing in case we have further disruption into the supply chain and looking at what are the alternatives to get product to site.

Host: On a separate issue, the Government has been talking for some time about the Capital Gains Tax Discount and also negative gearing. It’s unclear what they’re going to do. If they kept the status quo in place for new builds but got rid of it and wound it back for existing builds. Would that be something that your sector would be more willing to accept?

Denita: Unfortunately, whenever you create a tax hike on property, you get a decrease in supply of people investing in homes. So, the modelling that we released on Monday clearly shows that even if you keep the Capital Gains Tax (referring to Discount) on new homes, a new home becomes an old home, and it means, therefore, there’s a disincentive for investors into the property market. So, we’ve said no tax increases on property investment at a time when we’re actually looking at increasing supply. The Government has committed, as have we to the Accord target of 1.2 million homes. We need to ensure that we increase supply to get rid of the stress in the housing system.

Host: You must be preparing though for these changes to come in. I mean, they’ve been very widely flagged. Who knows whether what’s going on in the world at the moment forces the Government to change its mind, but it’s certainly been flagged that this is coming.

Denita: The Government hasn’t shown their intentions. It’s been obviously a huge debate at the moment. We said to the Government that it is not a good idea to do this. We’re all committed to increasing supply. A tax hike means a decrease in supply. So, unless the government is going to give us a range of alternative options to increase supply, then we’re in a difficult situation for them.

Host: Is there something else the Government should be doing to increase supply?

Denita: Well, the Government is doing a lot around increasing supply. The key issues for us at the moment around too much regulations, that we’ve got a major review of the National Construction Code, but our biggest issue is around capacity. We simply don’t have enough people to build. So, the focus is on apprentices but also, we implore more work on skilled migration. We simply do not have enough people coming through the skilled migration scheme to ensure that we have enough adequate people to build.

Host: Just before we let you go Denita, I mean, this has all happened very, very quickly, the situation in the Middle East. How quickly will fuel surcharges, those kinds of things disappear if Donald Trump’s right and a deal is imminent.

Denita: I’m no fuel expert, but certainly what we find from the building industry, and we’ve saw this from COVID, there is a long lag in the industry as things filter back through the system. So, we’re concerned that the longer this goes, then the longer the tail is. We saw that from COVID, the tail was literally 12 months once things returned to normal from everyone else. So, we’re wanting to keep builders informed. We want to make sure the Government is aware of the issues and that we’re learning the lessons of COVID so we don’t get into the extreme circumstances we found ourselves in COVID.

Host: Denita, thank you so much for coming in.

Denita: Thank you.

Media contact: Dylan Hafey, Media Advisor

0497 330 064 |  dylan.hafey@masterbuilders.com.au