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Date: 24 January 2025, 10:00am AEDT
Speakers: Denita Wawn, CEO Master Builders Australia
Topics: Apprenticeship incentives; housing crisis; employer incentives; skilled migration
E&OE
Denita Wawn, CEO Master Builders Australia: Denita Wawn, CEO Master Builders Australia.
Australia has a housing crisis. We need to build 1.2 million homes over the next five years to meet the needs of our community, but we are currently falling short. If we continue to build at the rate we are building now, we will fall short by 350,000 homes, and that is simply not acceptable. So, what are we as the industry, as well as governments around the country, going to do about it? One of the resolutions to those problems is finding more skilled labour.
So, today’s announcement by the Prime Minister to provide $10,000 for the duration of an apprenticeship for those undertaking a trade apprenticeship in the housing residential sector, is great news and a good start. We know that apprentices and up, the greater uptake and completion of apprentices, in the building trades is a critical component to solving the housing crisis. We know that we need more people starting, but more importantly, we need more people completing. Only 50 per cent of apprentices that start a building trade complete, and so $10,000 is a good start. We’ve got to realise that when you undertake an apprentice, you are paid to train. You will now get the $10,000 support to help you buy that ute, to help you get the tools. We also know that you will have a great career afterwards, and when you compare that to university, where you don’t get paid to train, you actually incur significant HECS debt, and there is question mark over your opportunities for a career, particularly with AI coming. Then we say trades is a fantastic opportunity for career decisions and choices in the years ahead. But finding apprentices alone will not resolve the housing crisis.
We also need to focus on skilled migration, and we also need to ensure that the private sector is in fact, investing in the industry. The housing approval figures last week showed that we are starting to see a greater number of detached housing, but more needs to be done with high rise and medium sized dwellings. If we don’t get enough medium sized and high-rise apartments and units built, we’re simply not going to meet that 1.2. So why are we not getting private investment in this sector of the market? This simply is that the economy is not strong. Inflation is stubbornly high, and we cannot see an interest rate cut in the near future. When you consider that, combined with a productivity decline of 20 per cent over 10 years for the industry, and costs at record highs of 40 per cent increase over the last five years, there is no incentive to invest. So, this is great news today, but we now challenge both the Prime Minister and the leader of the opposition, to put housing for more Australians first in the lead up to this federal election and get the policies right to ensure that we have enough homes for all Australians. Thank you.
Journalist: And how many extra tradespeople do you think this incentive will add to the sector?
Denita: It’s unknown. We know that a similar incentive for electrical trades with new energy incentives, has only seen about an additional couple of thousand apprentices come on board. So, it is incumbent upon us, as an industry working with government, to look at the full array of the package of opportunities for people who are thinking about a career in building and construction and selling that as a package. There’s more to be done. The government’s about to release an incentive review, which we will work with them, and Master Builders Australia in the coming weeks, will be releasing a document, Construct Your Career, which is all about ensuring that people have got the knowledge in front of them to know what opportunities there are in the sector.
Journalist: You mentioned some of the inflationary pressures there, how much have building costs skyrocketed by?
Denita: Well, certainly that is the, a big concern in terms of costs of construction. We know building, whether it’s a detached house or high-rise apartment, has increased by 40 per cent over the last five years, and that is simply unacceptable. This is not just about shortage of materials. We have the materials now. The issues of COVID have gone but instead we see stubborn increases in costs. Why? Because we have high inflationary costs impacting the price of materials. Shortage of people means higher costs in terms of labour. We’ve had industrial relations changes thrown at us that increase our costs, and we also have red and green tape, and on top of that, delays after delay after delay, add in costs as well. Time is money in our industry. Those combined have seen an increase by 40 per cent over five years, and that is unacceptable, and we need to rein that in.
Journalist: Some might argue that the $10,000 cash incentive will only add to inflationary pressures. What would your response be to that?
Denita: I think there are far bigger issues impacting inflation than $10,000 to apprentices that we’re trying to encourage. We see this as an opportunity to get more people into trades, and to be quite frank, if we don’t get enough people, enough skilled people, into our sector, then costs in building and construction will continue to rise, which of course, impacts inflation. We would hope that this actually eases inflation in the long term by encouraging more people. But we’ve got to remember, $10,000 is great, but it’s not the solution to necessarily resolving our apprentice skill shortage. There is a bundle of requests we have made to government. This is a great start, but more needs to be done.
Journalist: Do you think that there’ll be any impact from the devastation over in LA? Obviously, they’re going to have to rebuild, and materials could become another issue. Will that have any impact here in Australia?
Denita: Certainly, it is a worldwide competition for skilled labour at the moment, and of course, we are concerned that whenever there are natural disasters anywhere in the world, whether it’s here the US or the UK, there is a strain in the skilled population around the country. Australia is already behind the eight-ball when it comes to skilled migration competition. There is a, in Canada, the UK and New Zealand, all have a specialist trading fast track visa. We don’t. So, this is just going to add to the pressure of skills. But we also see that when you have got rebuilding of the nature of what has been seen in LA, there is also pressure on access to materials, that, again, will have an impact on costs as well. So, we are concerned that whenever we see those issues impacting the industry in another country, they will have an impact in Australia, which is why it is so critical that all political parties at this federal election put building and construction at the forefront of their policies.
Journalist: [Question Inaudible]
Denita: The $10,000 will be available to the apprentice throughout the duration of their apprenticeship, in instalments, they can spend it as they wish, with hope that they do so in a constructive way.
Journalist: Are you aware of any sort of criteria for eligibility?
Denita: No, we’re not, but certainly from my own personal experience, where my son is undertaking one of those energy apprenticeships, once you’ve signed up to an apprenticeship and you are starting to complete it, you get paid in instalments for the duration of the four years. So long as you continue your apprenticeship, you’re eligible for the payments, and that is the critical thing, that it’s an instalment based rather than a front-loaded grant. So, this is not just about ensuring you get people into a trade and starting an apprenticeship, it’s ensuring that we resolve that 50% completion rate that has to go up, and we need to focus that around how we get people to stay in their apprenticeship training.
Journalist: Thank you.
Denita: Thanks guys, really appreciate it.
Media contact:
Dee Zegarac
National Director, Media & Public Affairs
0400 493 071
dee.zegarac@masterbuilders.com.au