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Interview with John Stanley, 2GB Ray Hadley Show


Event: Interview with John Stanley, 2GB Ray Hadley Show
Date: 3 July 2024, 10.40am AEST
Speakers: Denita Wawn, CEO Master Builders Australia
Topics: Skilled migration; labour shortages; housing; building costs

John Stanley, host, 2GB Ray Hadley Show: Now we know we’ve got these massive, massive targets that are being set by all the state governments and nationally as well to try and build as many homes as possible. There’s a whole range of things, of course, that are standing in the way of that, such as all of the red tape and all of the taxes and all the planning controls. But then there’s the simple issue of getting houses built because they’ve got to be built by people and we’ve got this issue of construction workers, and the story today is saying that construction trade apprenticeships fell 22 per cent in a year. Largely because the COVID-19 era incentives for employers dried up. So, there was this $30,000 incentive for employers and when that ended, there was a sudden drop of around 100,000 in the number of people taking apprenticeships. Now, you can’t then as a government say, well, the reason for the drop is because the incentive has been taken away because there’s obviously an issue. And it makes a lot of sense if there’s a way to get more people doing it, do it. Whatever it is, we need to have, people have to build these things. Denita Wawn is the chief executive of the Master Builders Australia. Good morning to you.

Denita Wawn, chief executive officer, Master Builders Australia: Good morning.

John: Okay, so we’ve got this erosion of trade apprenticeships, people moving toward the university system. You’ve been saying that as well. So just, just before we take that broad approach, if the COVID era assistance has seen such a drop off, doesn’t that say we need to reinstate it in some way?

Denita: Well, the government has reinstated some of it, not all of it. And to give them kudos, the federal government, they are at the near completion of an apprentice incentive review process that has been really, really quite a detailed review into what works and what doesn’t work around encouraging more apprentices into the system. We’re expecting the recommendations in response to that report in the next month or two from the government, and so we acknowledge that the government realises that more needs to be done. But it’s not just up to government, it’s up to industry as well and really this is a cultural change, John. We need people to respect and understand that trade is a great career for people in this country.

John: Yeah. I did an interview on my night programme, fully fired up on the website as a podcast. Simon Stevenson who’s our tradie on this on this network, and you hear him on a regular basis. His daughter had a high-flying job in advertising and decided I’m going to go and get on the tools with my dad, and she loves it. So, she’s gone into the trade. She came on air and talked about it, and she got friends of her saying, what are you doing? And they see her working outdoors, enjoying what she’s doing. I’m surprised it’s hard to get people to make that switch.

Denita: I find it really perplexing as well when you look at the HECS debts that you will get if you go to university as opposed to being paid while you train as a tradie and the salary opportunities you have post general qualifications. And to be honest, if we look at the way in which AI is going to really change the way we work. I don’t think AI is going to take over building anytime soon. And so, the long-term career prospects are really quite encouraging in comparison to other qualifications.

John: Yeah, not only long-term career prospects, you can put out your shingle down the track and set up your own business as there’s the opportunity there.

Denita: Absolutely. I mean something like 250-odd thousand businesses in this country are standalone, self-employed businesses, being their own boss, enjoying when they can determine when they want to work. And that is a fantastic proposition for so many people. So, we’re promoting it and I love that story about the female tradie. We know we’re missing in action with half the working population. And we’re doing a lot of work to encourage women into the industry as well.

John: What about the cost of construction because I know we’re trying to build all these houses and I think say if you build, help me if I’m wrong here because I’m a lay person, I know many people would be comical with the notion that I’d try and do anything with that nail on a hammer but just the notion, for instance if you build, say a medium sized block of apartments and you’re building it along the coastline near Bondi or whatever. Now some of those inputs might be a little bit more expensive in terms of where you’re doing it, but fundamentally the materials and everything and the labour are all the same. You build that apartment block at Bondi, you’re going to sell it for four times what you’ll be selling an apartment block that’s built in Western Sydney and so doesn’t that create a problem with building in some areas where we need the construction but it’s going to be hard to get the return for the cost of building?

Denita: It is indeed, and this is fundamentally the problem we’ve got at the moment. There’s massive demand for new building. The 1.2 million homes over five years that the government keeps on talking about is a real number. It’s the demand that we have. The problem is that it costs too much to build at the moment, and therefore, that demand is latent. It’s not being realised, and particularly in the private market, whether it’s institutional investors or mum and dad owner-occupiers. And so, we’re seeing costs of building escalate to 40 per cent more than pre-COVID and it’s taking those units that you just described, John, three years to build as opposed to two years to build because of the delays.

John: But you get my point, don’t you? If you’re selling it for four times in some suburbs as opposed to other areas, then the city’s not there to build in some of those areas where you might need the housing.

Denita: That’s right. And we’re now hearing developers and institutional investors saying we are keen to invest in the places where we need for homes that we cannot get the returns to stack up. And so, the capital is there, the willingness is there, the demand is there, we just can’t get the numbers to stack up at the moment, and that is stopping a huge amount of development in this country, which is of real concern when we have so many people increasingly homeless and increasingly finding it too hard to find a rental property.

John: Yeah, we got someone here saying we’re not sole traders, we’re a small business. We’ve got to pay upfront for things we haven’t earned yet. So, and this is quite a few people saying customers paying on time. So, you do a job, and you put the invoice out and then you’re waiting for someone to pay you.

Denita: Yeah, it is a concern, John. And let, may I say to your listeners that we’re really cognisant of that. We’re working with tech companies at the moment to see what better systems we can have in place to ensure payment throughout the entire supply chain. We know that’s a real issue at the moment and we’re hoping to launch something later this year.

John: Okay, well, let’s hope so because you see all these numbers come on privately, you must be, you can’t be optimistic about the sort of numbers they’re talking about, are you?

Denita: No, unfortunately not. There are just way too many roadblocks for us at the moment in terms of building. People are there, are willing to do the work. And John, the thing that concerns me the most is that we’ll get to a situation where one minute will be saying we need more workers and the next minute I will be saying everyone is losing jobs simply because people are not willing to invest. We don’t want that situation. We’ve got to push through these roadblocks, make it more, you know, in terms of returns, people actually seeing a return for their money. That’s when we will start getting some stabilisation into the industry.

John: Alright, well look good luck with it and hopefully the conversations we’ll keep having on this might start to look a little more optimistic. Thank you.

Media contact:
Dee Zegarac
National Director, Media & Public Affairs
0400 493 071

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