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Event: Denita Wawn interview with Meecham Philpott, ABC Tropical North
Date: Wednesday 26 October 2022
Speakers: Meecham Philpott, host ABC Tropical North Topics: Budget, Housing Accord, Industrial Relations
E&OE
Meecham Philpott, ABC Tropical North: Denita, may I be so bold as to ask you your impression of the federal Budget, particularly with the mention of one million houses to be built starting 2024 to get people into houses?
Denita Wawn, CEO Master Builders Australia: Well Master Builders thanks the federal government for focussing on housing. We all know, and I’m sure your listeners too, that we’re short of houses around this country at the moment. And the reason being that we simply are not building enough houses to house all Australians. And I know while there’s been a lot of building activity including in your neck of the woods, nevertheless we still need more. And we’re forecasting that if we don’t have federal government assistance in some form we’re going to be very, very short of the houses we need. So as a consequence the federal government has shown some leadership and are putting together an Accord with state and territory governments, local government and industry and investors to say what can we do to fix this problem? And really the problem is really quite simple. It’s around is there enough titled land? We’ve got to stop development approval delays, we’ve got to look at planning and zoning. All of those things. That’s something that the governments have got to work out while we in the industry have got to deal with some of our supply constraints. We’re short of people, we’ve got material costs and of course our members are grappling with a lot of additional new regulation for the building codes. So a lot happening. We’ve got to get everything right because if we get more people into this country and more people into the regions to pick up all these jobs, we’ve got to have somewhere for them to live.
Meecham: 100 per cent and then you’ve got the migration in between states. Queensland is going to pick up 90,000 in the next few years. Question mark is can we build that many homes? Is this even feasible?
Denita: Well it will be if we get the settings right. That’s why it’s good that the government has said this is from 2024. That gives us time to sort out skill shortages. That’s why the government’s announcement around additional support for people to complete apprenticeships is so important. It’s why flexibility in migration is so important and supporting that end. So we’ve got to get the people right. We’ve also got to make building affordable and that means we’ve got to fight inflation because those material costs continue to stay extraordinarily high. And I think it’s also important to note the Budget included last night, looking at local manufacturing which we think is really important to this component of the debate as well. And of course we have to make sure our people have got the capability of implementing it in a way that is not overly burdensome on them. And that’s why there’s been frustration particularly in Queensland
that the Queensland has introduced some legislation, regulation around the building code and putting in changes really quickly, and we think that’s unfair to the industry.
Meecham: When you talk about the north of Australia, obviously we have cyclones, there’s very building codes that must be adhered to. So, for instance, the flat pack, the IKEA houses as they’re nicknamed, are they a possibility do you think?
Denita: Well if we get it right, and as you say, they’ve really got to be built to standards that withstand the weather. But I think we’ve got some innovative people in this country and I’ve been looking at some of the engineered timber products for example that is increasingly being utilised. We simply are not drawing enough local manufacturing in that area. So I think there’s some smart things that we can be doing to make sure that we are absolutely compliant with the regulations, particularly as you say around cyclone-proof homes. As much as we can make them cyclone-proof. But also we’ve got to make sure that it’s done in an affordable way. But the biggest issue about housing affordability is not construction, it’s actually land. And that’s why it’s so important to work with council and state government with respect to some of those, the way in which land is treated, how it’s taxed and the delays associated with land.
Meecham: I’m just wondering if we learned a big lesson from the last time we had a real push from federal government around getting people into houses? There was big coin on offer, a lot of people jumped in and took it, and it was rather interesting a lot of houses went up and the corresponding amount.
Denita: Yeah that’s right and certainly we had called for that stimulus. That stimulus was all about the fact that people were scared about the economy tanking. And we thought it was important to keep people in jobs and that was the concern that both the federal government, state governments and the industry had is that if we didn’t have stimulus then people were not signing contracts. It was good but then of course we had JobKeeper and the economy stabilised a lot quicker than we anticipated and so it then became far more popular than anyone every envisaged. The good thing about this Accord is that we aren’t looking at demand levers, we’re looking at the fundamental issues around why are we not meeting demand requirements? And it’s all about supply and it’s all about all levels of government working together with industry to solve that long term problem.
Meecham: It’s interesting though because originally this interview was booked to talk about the building industry basically saying let’s not get too overregulated with government and that sort of thing – it’s all about supply and demand and those sorts of challenges. And yet, what’s come out in the Budget, you really are going to hop into bed with the federal government on this one surely?
Denita: Well the Budget we have been really happy with the recognised long term problem and peered away for a solution. Tomorrow I’ll be talking about industrial
relations with the government introducing their much anticipated industrial relations bill. We are obviously have got significant concerns about the implications for that not only for our industry but the economy at large where they are just going to overregulate workplace relations to the extent that we’re going to see massive price hikes with no productivity offset. That’s a debate for tomorrow. Today we’ll say well done federal government, tomorrow may be different.
Meecham: You mentioned getting more manufacturing going. Good luck with that, 35 per cent increase in power costs.
Denita: That’s right. That’s the challenge isn’t it? The industry across the board is facing a massive increase in costs as are consumers themselves and that’s because of inflation. We’ve seen the inflation figures come out today, I think they’re around 7.3 per cent. That’s not good. The government said last night that they think it’s going to go even higher than that and that’s not good for anyone in the country at the moment, hence the reason why the RBA continues to increase interest rates. So there’s no doubt we are in a great difficult economic circumstances over the next six to 12 months. Let’s hope that we miss recession but certainly, I think, we’re heading for a stagnated economy, that’s for sure.
Meecham: Okay, with that in mind Denita, is that a perfect time that the government gets in and holds the hand of our builders and they build? Because the private sector is not buying because they don’t have the money so therefore you keep your building industry going that way while they’re building public housing?
Denita: Absolutely, you’ve got it in one. For us, the big issue about representing the builders is to ensure that they’ve got a sustainable pipeline of work going forward so they know they can keep their employees on and that they can support the entire supply chain. So for us it’s all about making sure there’s stability in building, that we are continuing to focus on 200,000 homes per year across the country. And that includes commitments from levels of government in respect to social housing as well as community housing. It’s all part of the mix.
Meecham: So Denita, just having a look at the whole budget side of things. Looking forward from a building industry point of view. What is the stunning headline, the beauty, the real good news story?
Denita: Well I think the good news story is that we’ve got a federal government that has committed not only to social housing and community housing but they also recognise the fundamental problems of making sure that we can house all Australians. And last night was a good start in that conversation. We’ve now got to get on to the good, hard work and actually implement it.
Meecham: Okay. What’s the scary story?
Denita: The scary is story is industrial relations. We know that the government is going to introduce this legislation. They’ve identified a number of things in the Budget last night including the abolition of the Australian Building and Construction Commission that takes away the police when it comes to our industry that’s not great at obeying laws, industrial laws. That’s what’s concerning us at the moment. Then all the positives out of the residential sector are going to be outweighed by a massive loss of productivity because of the activities from an industrial relations point of view. And particularly the building unions curtailing the activity of building particularly in the commercial sector. That’s where our concerns are and I’ll now turn my mind to talking to the crossbench senators in particularly to ensure that they are aware of our issues as we address this legislation that’s being introduced tomorrow.
Meecham: Denita, fascinating conversation. That was gold. Anything I missed that you want to make a point about?
Denita: No, you covered it all. Thank you so much.
Media contact:
Dee Zegarac
National Director, Media & Public Affairs
0400 493 071
dee.zegarac@masterbuilders.com.au