Event: Denita Wawn interview with Madeleine Morris, ABC News Breakfast
Date: Thursday, 30 March 2023, 7.20am AEDT
Speakers: Madeleine Morris, finance presenter ABC News Breakfast; Denita Wawn, CEO Master Builders Australia Topics: housing, supply constraints, inflation
Lisa Millar, host ABC News Breakfast: One of the other big issues that we’ve been looking at on this program is what’s going on with the housing crisis out there. Mads.
Madeleine Morris, finance presenter ABC News Breakfast: Lisa, we’ve had calls from Master Builders Australia this morning for more action to address rising building costs which are of course are adding to the difficulty of finding housing. The association claims that could help to drive down inflation. For more on this, we’re joined by the chief executive of Master Builders Australia, Denita Wawn. Denita, thanks very much for joining us. So, the inflation figures we got yesterday, 6.8 per cent. The cost of building a new home is well outstripping that. Nearly 10 per cent. What do you think would actually change that and bring that down?
Denita Wawn, CEO Master Builders Australia: Well, we believe that it’s not only about interest rates. Interest rates also hurt the housing market if we continue to see increases. So, we think there are other alternative ways. And in the housing market, it is a lot about the supply side barriers of building. And that is the purview of the state and territory governments. They’ve got to start looking at more titled land, flexibility in planning and also looking at developer costs. So that would have a significant change in the way in which we look at the cost of building more homes in terms of the costs of land.
Madeleine: Are you seeing enough leadership from the federal government on sort of rallying the state and local governments about this?
Denita: We’ve been exceptionally pleased with the federal government in this space. They’ve really taken up the challenge of the housing debate, particularly around supply. We’ve commended their policy in terms of establishing the Supply Council and also Jim Chalmers led the charge on developing a Housing Accord which in part looks at what the states and territories need to do around the supply of housing. That is a critical issue that we are facing in this country. The cost of materials, the cost of labour will eventually go down once we sort out labour shortages once we see the price of materials decline. But the key issue in this country is around about supply barriers and that is critical that the states and territories actually meet their commitments under the Housing Accord.
Madeleine: You’re talking the cost of supply of labour there. The ACTU this morning calling for a seven per cent increase on minimum wage and also to associated awards some of which I would expect would be in the housing sector. What do you say to that?
Denita: Well, certainly in our industry the statistics show that we pay well above award. But when it comes to wages, we know that if it keeps on trying to stay within the inflationary costs, we actually see an increase in inflation.
Madeleine: Sorry just to interrupt you there. The consensus seems to be that we aren’t seeing a wage-price spiral at the moment hitting inflation that inflation is coming from those areas like the supply side that you have already identified.
Denita: That’s correct, and it’s important that we consider appropriate wage increases that are due to workers. But equally, if we look at putting up wages at the same level as the current inflationary figures, it will undoubtedly have an impact on inflation and instead keeping it at higher levels rather than lower levels. So, we’ve got to find some even ground here to ensure that we are not putting ongoing inflationary pressures onto the economy because that ultimately will result in job losses. But our focus at the moment is looking at more people entering our industry. We’ve estimated nearly half a million people need to enter our industry in the next two to three years to meet the demands of the industry. And that requires both migrants as well as people looking at building and construction as a job and as a career.
Madeleine: Half a million people is a lot of people. We’ll see how they end up. Denita Wawn, thanks for speaking to News Breakfast this morning.
Denita: Absolute pleasure, thank you.
Lisa: Thanks, Mads. So much to talk about on this subject.
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