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Event: Interview with Gary Adshead, 6PR Perth
Date: 17 May 2024, 11.07am AEST
Speakers: Denita Wawn, CEO Master Builders Australia
Topics: Federal Budget, Opposition Budget Reply, Housing Crisis, Migration
E&OE
Gary Adshead, 6PR Perth: Let’s turn to some reaction to it. Let’s start first up with the Master Builders Australia CEO Denita Wawn joins me on the line. Thanks very much for your time, Denita.
Denita Wawn, CEO Master Builders Australia: Good morning.
Gary: Okay. The migration numbers, which of course he’s going to bring down significantly if he is to become the Prime Minister of the country in 2025, is that the most significant solution to the housing crisis we face?
Denita: I wouldn’t say it’s the most significant, and a word of warning to the opposition, which I do recognise that Peter Dutton acknowledged this last night, and that is, we rely heavily on migration for skills. And if we’re going to build more homes, given the significant tradie shortage that we’ve got in our sector, we need to rely on migration for filling those gaps, BuildSkills Australia says that we need 90,000 more tradies in 90 days to build the 1.2 million homes that is forecast, that we need to meet population demand. So, we know skilled migration is critical. The opposition leader did acknowledge that last night. So, we would express caution that if you are going to cut migration, do it in a way that does not curtail the economy. It’s as simple as that.
Gary: Well, do you think that the approach he’s made – he’s made an approach which says that we will keep the skilled migration policies in place to a degree, and we will make sure that there’s enough of the workforce required to build the homes etcetera, but the overarching number will be slashed, you know, in 2025 and what, why don’t you think that would work?
Denita: Well, I think because, and as the Reserve Bank, one of the Reserve Bank deputy governors said this week, that the housing crisis is as a consequence of a multitude of impacts. No doubt that a reduction in migration would alleviate it in some way, nevertheless, there are a multitude of issues impacting higher demand, that includes changes in household makeup. It includes different types of houses that people are needing in different parts of the country, and it all, it is also impacted on our lack of capacity to bring on additional supply, because of all the supply constraints. So it is one lever amongst about 10 that impact the housing industry. It’s something that we think needs to be debated in this country and if the opposition believes that cutting migration is going to help in the short term, we appreciate and acknowledge what they’re trying to do, but they’ve got to be cautious and not then making a greater negative impact on what is already a tight labour market.
Gary: Let me flip it then. What do you think the possibility is that Labor’s promised 1.2 million homes by 2030 is realistic right now?
Denita: Well, if you say it right now, it’s not realistic. And that is because of the fact that our industry is under a productivity slump and it’s only going to get worse. It’s now costing us 40% more to build than what it was pre-COVID. We find that the compliance burdens upon us are huge. A builder was telling me last week that when he first started it, he needed one admin support person to 20 staff. It’s now 50-50 in terms of the need for compliance. We have restrictions on industrial relations and that’s going to get even worse when it comes to the implementation of the ALP’s IR laws, and of course we have a workforce shortage, and I haven’t even started on our building approval delays and so forth. The list of problems in the housing industry is endless, and unless all governments are working towards the same outcome, we will continue to a fall well short of that 1.2 million.
Gary: Well, it sounds bleak when you consider how many people, as Peter Dutton mentioned in his speech last night, how many people you see around town who are in tents or living in the back of their car right now. What, what would you say to them. You know, there’s grand visions, but it doesn’t sound like practically things are gonna happen anytime soon.
Denita: No, they’re not, and it’s certainly from Master Builders perspective, we have been pushing these issues now for decades, we see a lot of talk and no action, and it is just getting progressively worse. And to our most vulnerable, we need governments to pull their socks up and get their act together. The federal government did announce on Tuesday night some more money towards homelessness and so forth, but the capacity of the industry is such that it’s going to take a long time to get those houses actually built. We put out some reports two weeks ago that said of the 42,000 new homes that the federal government is spending, we probably can only build 8,000 of those because of the cost and capacity constraints impacting the industry. So, the housing minister can make some fantastic announcements, but if we don’t get those costs contained, if we don’t resolve our capacity constraints, and her counterparts in other ministerial portfolios don’t get their act, then we’re in serious trouble in this country. And that’s not just at a federal level, but that’s at a state and territory level as well.
Gary: So, look, I think people listening to this and also having taken in some of what Peter Dutton said last night, would say it’s almost a very basic sort of decision to say, well, let’s cut the number of permanent migrant intake when we become government in 2025, from 185,000 to 140, therefore 45,000 less, it sounds like that would work in terms of the people rushing for homes and rentals.
Denita: It’s unfortunately not that simplistic. It might be a good political statement, but it’s not that simplistic. It may be one lever amongst 10, and we say to all governments, to all parties, that you’ve gotta look at this in a holistic way. You have to get literally 10 portfolio areas, 10 shadow ministers, 10 Federal ministers working collectively together to get all the systems working in tandem. It’s a cog of a wheel and at the moment neither the government nor the opposition have got the wheel turning in the right direction, let alone actually working in the first place. So, we will continue to push them both hard in this now 12 months, we’ve got less than 12 months to a federal election. They’ve both got to get their houses in order, excuse the pun, but that’s what’s got to happen.
Gary: Can I ask you Denita, I’ve said a couple of times in in, in the last few weeks as we talk about, you know, the in inverted commas, the housing crisis, the rental crisis, the affordability crisis, the availability crisis, it goes on and on. Can I ask you this straight up, is the situation with housing and rental in this country reached the stage of being a national emergency?
Denita: It is a national emergency, and your listeners will know, and certainly from our research, everyone is talking about it. Everyone is stressed. We know that the helplines, of the likes of Lifeline and so forth, are getting inundated more and more about the stress in relation to housing and homelessness. So, we have a national emergency. It’s been decades in the making, and governments have got to stop finger pointing and they actually have to work collaboratively together, and stop making statements, and actually do something about it. I think the community around the country deserve politicians to work in their interests as opposed to playing politics.
Gary: And the point I’m trying to make is that when you do declare a national emergency around something that might be a disaster zone or whatever, and there is a bipartisan approach. There is a national focus on what’s required. And yet we’re heading into a 2025 federal election – could be the end of this year, we don’t know yet, but, most likely 2025, and it’s all different policy settings.
Denita: That’s right. And that is our absolute frustration, that it is all over the place and there’s no collaboration. There is talk of collaboration, but we continue to not see it. And that is the frustration, we want to get on and build homes for all Australians, and all Australians deserve a roof over their head. It’s that simple. But the governments continue to not get the fundamentals right when it comes to ensuring that we have a strong economy, and we have systems in place that enable us to get on with the job. Instead, they constantly are putting up barriers and it means that people are not investing in housing. It’s as simple as that. And its all really good having government handouts for housing, but at the end of the day, the housing crisis will not be resolved until mum and dad’s as owner-occupiers, as people, as investors, or even institutional investors or property developers, think that they can actually spend money in a way that they’re going to get a reasonable return. They’re not going to spend money to lose money on housing. So, we’ve got to get the economy right so it’s worthwhile investing in your own home.
Gary: Alright, well, the debate rages on Denita, thank you very much for joining us.
Denita: Pleasure. Thank you.
Gary: Denita Wawn there at Master Builders Australia, the CEO.
Media contact:
Dee Zegarac
National Director, Media & Public Affairs
0400 493 071
dee.zegarac@masterbuilders.com.au