Interview with Graeme Goodings, FiveAA

Event: Interview with Graeme Goodings, FiveAA

Date: 26 June 2026, 9.50am AEST
Speakers: Denita Wawn, Master Builders Australia CEO

Topics: Current state of the national construction industry, skilled migration, apprenticeships, workforce shortage, cost and time to build, impact on small business, red tape reduction.

E&OE

Graeme Goodings, FiveAA host: Australia’s construction sector is in crisis, with a fresh wave of business closures sweeping the nation. New figures from credit reporting agency Equifax reveal a 10 per cent spike in construction companies shutting down in the first quarter of this year. Joining us now is Master Builders Australia CEO Denita Wawn. Denita, good morning to you.

Denita Wawn, Master Builders Australia CEO: Good morning.

Host: Is this situation as serious as it sounds?

Denita: It is unfortunately. We’re seeing a compounding of impacts in the industry at the moment, and it’s quite interesting that there is so much demand for our work at the moment. We need to build more homes, more schools, more hospitals, more roads, you name it, but unfortunately the pressure on our economy means that people just not being able to afford to realise those needs, and that is putting pressure on the building and construction industry.

Host: I mean, the pressure is coming from so many angles, how much is it down to the current workforce shortage?

Denita: Certainly, it’s a part of it. We know that if we’re going to meet the housing needs of all Australians, we need at least another 120,000 odd workers in the sector over the next four years. The infrastructure demands around the country also require at least another 300,000 to 350,000 workers, and so when you look at that, it’s nearly 500,000 extra workers on top of the 1.4 million that we already employ, and that’s a significant ask, and when we’ve been not good at replacing those who leave the industry, either through apprenticeships or through skilled migration, then we’re really stuck, and that means that the costs have escalated in part because of workforce shortages.

Host: So, what more can be done to attract people to the construction industry?

Denita: Well, first and foremost, we know that we need to get people really seriously considering trade as a career, whether they’re a student about to finish school or whether they’re someone looking at a career change. There are huge work opportunities over a long period of time. Once you’ve completed your apprenticeship, the pay is exceptional, and of course you know AI is not going to take over a trade work anytime soon. So, we need to do more to encourage people. As a credible pathway, it has been under appreciated as a career choice for a long period of time, we’ve had too much concentration on university degrees, but we also need to look at skilled migration. We know that there is stress at the moment in the community around immigration, but we say that we simply haven’t been bringing in enough skilled migrants, and there needs to be a greater attention on skilled migration, when it comes to the migration approach by Government.

Host: Now, even if we could build enough houses, the cost of housing is shutting out a lot of people from the industry. I see excessive red tape could be adding up to $320,000 per new house. That seems an amazing amount of money.

Denita: It’s quite incredible, isn’t it? When you look at how we build in this country these days, and the costs associated with it, we’ve got to remember that the time it now takes for planning approvals, building approvals, and so forth has built in a lot of additional cost. Taxes now can add up to nearly 50 per cent of the cost of the new build, and of course we also have a situation where those workforce shortages also mean it’s more expensive, and the other important factor is it’s taking us longer to build. If you look at high-rise development, for example, five years ago it would take us about two years once we start construction. The average now is three years. Why? Because we don’t have enough trades. We’re waiting for approval to start, and we’ve got complications around the red tape. We acknowledge it’s really important to have regulations to ensure that we’re building safely and appropriately, but there are better ways to regulate the industry than what we’re confronted with at the moment.

Host: When it comes to the red tape, about $320,000 to $350,000 per house, as you’ve said, what changes, what specific changes would the Master Builders Australia like to see to reduce that burden?

Denita: Well, first and foremost, there’s a bit of good news, and that is that we’ve said that the National Construction Code is just simply too confusing, too complex. For example, the part of the code that helps with detached residential building in the 1990s that was around about 90 pages long, it’s nearly 900 pages long, of a lot of convoluted complex provisions. The Government have acknowledged this. The Federal Government with state governments have said, let’s streamline that and let’s also make all of the rules around that, including standards, actually free. I find it quite amazing that it’s taken us now until 2026 to say if builders need to build properly, they should not be paying to access the law, and that’s what we’ve been confronted with.

So, that’s a good part of the story, but where we’re really trying to focus attention on now is why it takes so long for development approvals and building approvals. Some state governments are doing better than others, and certainly the South Australian government is doing well in that space, but we need to see greater consistency around the country.

Host: Are smaller builders at greater risk of closure than the major builders?

Denita: There is already stress in our industry that yields are really, really tight. Interestingly, though, there doesn’t seem to be a difference between small, medium, or large when it comes to risk of insolvency. When you’re dealing with tight margins and the potential for increases in costs that come at you unexpectedly. A project that is going to be viable becomes unviable very, very quickly, and when you’ve got a number of projects on, it’s very easy to get behind, unless you’ve got a significant amount of equity behind you, and so what we find at the moment is, for example, when we sell all of those transport levies because of diesel cost escalation that was adding up anywhere between 8 to 10 per cent increases on material, for example, to be actually delivered on site. So, when you’re dealing with small margins, it becomes more complex when those costs come at you unexpectedly, and so therefore builders are looking at really closely, which projects they take on, what their margins are, and how they’re going to manage both cash flows.

Host: It’s obviously a pretty grim picture at the moment. What is your outlook for the construction industry over the next 12 to 18 months if there aren’t dramatic changes?

Denita: Well, we’re very concerned, and I think when you saw the changes that the Federal Government made in the recent Federal Budget that escalated those concerns, we were hoping for a Federal Budget that was going to turbo charge supply for our building and construction industry, and while there were some good things at the edges, the Government in their decisions around investment in property, particularly around capital gains tax and negative hearing by their own numbers, have said it will reduce investment in the building and construction industry, and then we’ve seen some subsequent changes that will also divest investment into parts of the industry. So, we’re really concerned, and as I said from the outset, there is a huge demand for building and construction in this country. There’s a lot of work that needs to be done, but things are difficult for the industry to actually realise that demand.

Host: Denita Wawn, thanks for your time. Master Builders Australia CEO with the woes confronting the construction industry at the moment. We need more and more houses, and yet more and more construction businesses are going to the wall. It is not a positive recipe in any way, shape, or form.

Media contact: Dylan Hafey, Adviser, Media & Government Relations

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