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Event: Interview with Georgia Stynes ABC Canberra Drive
Date: 17 February 2025, 5:20pm AEDT
Speakers: Denita Wawn, CEO Master Builders Australia
Topics: Productivity Commission Report; Housing Crisis; Skills Shortages
E&OE
Georgia Stynes, host ABC Canberra Drive: Well, as we’ve been talking about this afternoon, the productivity report that is out. The Productivity Commission has put out a report. Now this is in regards to housing, and it’s called Housing Construction Productivity: Can we fix it? Now, it provides seven reform directions for governments. The idea is to help make home building more efficient, to get more housing stock in. Now, if you know a builder, like I do, have a builder in the family, perhaps, or listen to ABC radio, you would have heard that builders have long been calling for a focus in this area. Making things easier in all different ways, in terms of red tape, as they call it, but also in terms of overhauling some of the things, including getting or helping them to get the right tradesmen or staff in as well. Joining us is Denita Wawn, Master Builders Australia, CEO and our guest this afternoon. Good afternoon.
Denita Wawn, CEO Master Builders Australia: Good afternoon.
Georgia: This report, I mean, was there anything that you didn’t agree with, or were you mostly thought it was pretty favourable in terms of what you’ve been pushing for?
Denita: Well, it’s great to hear that a government agency is listening to industry and actually reflecting exactly what we’ve been saying for a long period of time, that we have been handcuffed, that we’ve seen massive decline in productivity, which has resulted in a massive increase in cost of building our homes in our cities. And so it is great to see, but it is sobering reading. And you’re right, it identifies a range of issues that we need to resolve so we can get supply coming again.
Georgia: Can we talk about the different levels of, in what is called red tape and bureaucracy, but some people would say, you know, controls to make sure on sympathetic development, like those sort of things that you go through. Can you reassure people that you can remove some of those layers without, I guess, building and building stock being the worse for it?
Denita: Absolutely. I mean, we acknowledge ourselves as an industry that you need to ensure the community well being, the environmental well being. But there are ways of achieving it without creating turmoil and delay that therefore increase the cost of a development. So if we look at the layers of regulation that starts at a local level, then goes into state and then, of course, we also have, in some instances, federal government regulation as well that prohibits and inflicts inflexibility in our sector. So we’re saying that there are a range of mechanisms that you can easily change to make it easier. But the other really important factor is the time it takes, even if you change that regulation, the time it takes is quite extraordinary. Why? Because we have a shortage of planners. We have a shortage of building surveyors and so forth, and so even if you make it more reasonable, you’ve also got to have appropriately skilled people in government to ensure that you’re getting those approvals through as quickly as possible.
Georgia: I want to talk about workforce because I had numerous conversations, I think, in the last 10 years on this program, talking to on ABC Radio Canberra, talking about the problems with, say, apprenticeship schemes and the like. Can you tell me what you’d like to see in this area?
Denita: Well, certainly, first and foremost, we need to encourage more people into apprenticeships and then support them and their employers to ensure that they actually complete their apprenticeship. Only 50 per cent of people that go into a building and construction trade complete their apprenticeship. That’s totally unacceptable, and we need to increase that. The government has made some announcements on supporting building construction apprentices, but we say it doesn’t go far enough. We’re doing our bit. Today, we’ve actually launched a booklet called Construct Your Career. It’s all about all the jobs you can do in this sector to try and encourage more people in but you know, we need a concerted effort from all levels of government to encourage kids into an apprenticeship. Don’t know about you, but certainly getting paid to train, as opposed to incurring a massive HECS debt, is of pretty much interest to many people. So we’ve got to do our bit on that. But equally, we need to look at skilled migration. We have called for a fast track tradies, you know, migration focused on tradies, just like there is in Canada and New Zealand and the UK. And at this stage, it’s not been accepted by the Government.
Georgia: Just back to, sorry, just back to getting young people in, or getting younger people I mean. You look at certain, I say plumbers or electricians, I think they will earn a fair bit, you know, if they’re successful at one point. But is the problem getting them into is that apprenticeships aren’t paid enough? Is that part of the issue there?
Denita: Well, people say that apprenticeships aren’t paid enough, but the reality is that you’re getting trained, you’re starting from a zero base, and as you go through the apprenticeship system, you get paid in a higher rate of pay, commensurate with the amount of skills that you’re getting. We’ve also got to recognise that when you’ve got someone who is supervising an apprentice, they are not as productive as they can be, and as such, that’s why we’re also calling for employer incentives. So, you know, certainly from when talking to apprentices, they get pretty excited that they get paid to train and that they won’t incur HECS debts like their peers. And so certainly you’ve got to look at it from a holistic point of view, not only just what you get paid when you train, but also what your take home salary will be when you’ve completed your course.
Georgia: One of the points that was made, also through the report, which I’m sure you’ve seen, is this idea of, I guess, doing things a bit differently, or, you know, looking at new ways to build things. So, this might well be, you know, lots of things being done, say, off site and then brought in. You know, like changing the way they build. Do you think there’s appetite within the building industry to change some of the practices that might also lead to efficiency?
Denita: Absolutely, there is a real interest in modern methods of construction, pre-fabrication and so forth. The difficulty is that when you talk to the builders, whether they’re small or large builders, they’re saying at the moment, to get that at scale, you actually it’s more expensive than the traditional methods of construction. So, we need to invest in the research and the procurement practices you need to actually get the cost down on prefab. And we have a fantastic research that is funded by federal government, the CRC 4.0 that is looking at that. So more needs to be done in that space. But at the moment, the dollars are just not stacking up, and as such, we still focus on those traditional methods. And if you look overseas, with the exception of a few countries, they’re still sticking to those traditional methods. So that is something we need to address, but we also need to recognise that when you’ve got a shortage of skilled labour, it means that you can’t get those 40 odd trades that get onto a home working in conjunction with each other. So they will be more expensive. And then, of course, the time wasted between the trades coming in also escalates price and also brings down productivity as well.
Georgia: How is our, I guess, drive to, you know, get our homes built or renovated the lowest cost, but also our reliance on, say, overseas materials impacted things? The idea that we’re waiting to get things from overseas.
Denita: Yeah, interestingly enough, Australia actually around about 60 odd percent of building materials are manufactured, sourced from Australia, which is great. Certainly in the peak of the building boom through COVID, we were having problems with materials, but that’s not such a huge issue. Nevertheless, it is really important that we don’t necessarily look at the cheapest price. You’ve got to ensure that you’ll get the quality. That you’ve got people with insurances and all of those sorts of things. So we do implore clients to look at or do their due diligence properly, and don’t necessarily look at the cheapest price. Our builders, from a Master Builders’ perspective, want to focus on that best practice, and will continually strive for best practice. But at the moment, costs are huge. 40 per cent increase in costs of construction over the last five years, and that, in part, is because of those skill shortages, because of that regulation. And so builders are now saying to us, I haven’t got a huge amount of work on my forward books, because everyone is just waiting to see a cost decrease, and that’s not going to be occurred just because of a, you know, 0.25 per cent decrease in interest rates. This is a significant structural issue that we need to resolve at a microeconomic perspective.
Georgia: Thank you so much for your time today and just explaining some of those issues from the Master Builders’ point of view. Thank you.
Media contact:
Dee Zegarac
National Director, Media & Public Affairs
0400 493 071
dee.zegarac@masterbuilders.com.au