Interview with Edward Boyd Business Now with Ross Greenwood, Sky News

Event: Interview with Edward Boyd Business Now with Ross Greenwood, Sky News
Date: 09 October 2024, 4:47pm AEDT
Speakers: Denita Wawn, CEO Master Builders Australia
Topics: Housing; labour shortages; apprentices; CFMEU

E&OE

Ed Boyd, host Sky News: Welcome back, Australia has just posted its worst year for homebuilding in more than a decade, with the latest figures from the bureau of stats showing roughly 159,000 dwellings were approved for construction over the 12 months to June. Now these figures are a concern for the federal government, which is aiming to build 240,000 homes per year over the next five years. Joining me now is Master Builders Australia Chief Executive Denita Wawn. Denita, thanks for your time, how bad are these building numbers for our economy and the construction sector overall?

Denita Wawn, CEO Master Builders Australia: Not good at all, not good for the community, not good for the economy or our industry. We know that all three levels of government have agreed to a target of 1.2 million homes over five years, if we stick to these numbers on building approvals, we will fall over 400,000 short. It is a combination of cost escalation for building and construction, but also concerns around interest rates and that inflation that is just not budging.

Ed: Yeah, there’s also some stats out today about a falling number of people completing their apprenticeships. Why are there less people right now wanting to be a tradie or finishing their apprenticeships?

Denita: 130,000 workers every year for the next five years in our industry, and that’s particularly tradies. There’s a wealth of career opportunities for people, whether they are young or old, but we are simply struggling to attract and retain apprentices. It is a difficult issue for us. At the moment. We know the government is investigating apprentice incentives, and so we implore them to get that report out sooner rather than later, because if we’re going to have any chance of building 1.2 million homes, a significant resolution of that problem will be seeing far more apprenticeships in the construction trades than we’re seeing to date.

Ed: Yeah, that target, it’s about 240,000 homes a year for the next five years, are we ever likely to get there?

Denita: We’ve only ever got there once over the last few decades, and that meant that we had to build more than 50 per cent of those homes as high-rise buildings. And to do that, we need more people. So unless we have a significant shift in apprentices, unless we have a significant shift in a greater use of skilled migrant workers in building and construction, then we are having no chance to get to that 1.2. We know people want to spend money on housing, but they are not at the moment, simply because the costs are too high, whether they are owner occupiers or investors, and so we need to see those costs decline, and a lot of that is about getting the right people in the right locations. And this is a problem Australia wide, it is not just in a few capital cities.

Ed: Yeah, let’s take a step back and have a look at the pressure the constructive sector is under. You mentioned, interest rates are still at 12-year highs. I mean, how difficult is it right now to be running a construction business or a building business in this country?

Denita: It’s exceptionally difficult, the yields are really, really low. We’re seeing situations on which the cost escalations that, in many instances, are borne by the builder, because fixed price contracts are finding very low yields, and sometimes building at a loss, building at a loss because you can’t find the trades at the right time, at the right price that meets that fixed price contract. And of course, because people are concerned about the economy at large, we’re finding businesses are now saying to us they haven’t got much in their forward book. And so that is increasingly concerning, that we will go from one instance, high demand to another, very low demand, simply because people are not willing to pay the prices that is currently the case for building and construction. So a really difficult time for our 99% of 450,000 building businesses are small and medium sized businesses, and so we really need to ensure that we get a consistent pipeline of work and a consistent supply of labour to ensure the wellbeing of those businesses.

Ed: And to bring in that labour and to try and increase the number of apprenticeships around the country, who’s really leading that? Is it state government? Is it federal government? Is it you, the industry?

Denita: It has to be all three. Certainly we know that as an industry, we need to employ more apprentices, but to do that, we need certainty of our pipeline of work. We haven’t been good at employing females in our sector, only 4% of trade qualified people are women. So we’ve got to do a lot more around that space and in this industry, we’re really proud of our Women Building Australia program. But more needs to be done. We need targeted incentives from both state and federal government. The federal government is sitting on a report at the moment, and we ask them to release that as quickly as possible so we can get an idea about how to address these problems that we are currently facing as an industry.

Ed: Last time we spoke was back in July, and we talked about the toxic culture at the CFMEU on some job sites around the country. Now, over the past few months, since we spoke, have things improved at all on those large-scale construction sites with the CFMEU?

Denita: Certainly things are improving now that we’ve got an administrator in place, but it is fair to say that a lot more work needs to be done for the administrator have full control of the Union. We still hear stories, even today, about problems on work sites and bullying and coercive behaviour, particularly from those who are “executive in exile.” So we are working strongly, as much as we can with government and with the administrator, to assist in ensuring that we totally ban that toxic culture, and we get on with actually being a productive industry. Our productivity has declined by nearly 20 per cent over the last 10 years, and that is simply unacceptable. So we are certainly keen to, once the administrator has got total control, to sit down and how we can work collaboratively, together with the union, like I’ve done with many other unions in other industries over the years, to work constructively for both workers and employers and the economy at large.

Ed: So you’re pretty positive about the next few months then?

Denita: Well, I wouldn’t say positive, but the signs are definitely improving. I think there will still be uncertainty on work sites while we wait for the high court case, where some ex-union officials are taking the matter before the High Court and unlikely to get a decision until February. So we are concerned about ongoing ripples in the sector and levels of hesitancy and uncertainty until at least February, but we certainly want to work with the administrator to ensure that we get rid of that toxic culture in the sector for once and for all.

Ed: Denita Wawn, thanks for your time.

Denita: Thank you.

Media contact:
Dee Zegarac
National Director, Media & Public Affairs
0400 493 071
dee.zegarac@masterbuilders.com.au