Event: Interview with Matthew Pantelis, FIVEaa
Date: Wednesday, 1 November 2023
Speakers: Denita Wawn, CEO Master Builders Australia
Topics: industrial relations; building times, Housing Accord
Matthew Pantelis, host FIVEaa: Well the Master Builders Australia say that the building industry isn’t going to meet the national target of 1.2 million new homes over the next five years. In fact, it’s going to fall 160,000 homes short of that. That even is after a renewed surge of apartment investment that’s been triggered by not enough dwellings essentially and rising prices. There’s the demand, there’s a shortage and even though we’re moving in that direction of trying to get there we’re going to be well short. Denita Wawn, CEO of Master Builders Australia on the line. Denita, good morning. Thanks for your time.
Denita Wawn, CEO Master Builders Australia: Good morning. Thank you.
Matthew: Why are we going to fall short? Given the demand, particularly, the homelessness crisis we have. The fact that everybody is after a builder, is it just not enough people around? Materials? Is that it? Tradespeople?
Denita: It’s a combination and yes you’re right the demand is there. We’ve got additional financial commitment from government on social and community housing. We have a high demand of institutional investment right through to mum and dads but there’s a range of factors. Certainly, not enough people, particularly skilled people. We need more people into the sector. So, it’s about ensuring we retain people but also encouraging more. It is about delays in building in itself. We know that there’s been a significant increase in the start to finish process of approvals for land developments and, subsequently building approvals, and even occupancy certificates. I am unaware of apartments and townhouses that sit there sometimes for eight to 12 weeks waiting for someone to give it an occupancy certificate so people can be moving in. So, there’s a range of different factors and certainly the government is seeking to support us on some of those issues around council delays and we’re working with the local government association. We’re working with the government on skilled issue whether it’s training or migration. And we’re also of course dealing with some of those shortages and cost impacts on supplies. So a myriad of issues but the fundamental is we have to build a million homes over five years starting from 2025 otherwise, we’re simply going to have a worsening housing crisis.
Matthew: Why, for instance, is the occupation certificate taking so long? What’s the problem there? Is there just not enough inspectors, as well as everything you’ve said about tradies?
Denita: Absolutely. There’s just simply not enough resources and our sympathy is to local government. Many of them it is not because they are not deliberately withholding approvals and deliberately waiting for things to be waiting. It is simply they have not got the resources to do it. They have got cost constraints themselves. So it’s good the federal government has committed some funding specifically to local government to help them with us keeping their resourcing, looking at new technology to improve the speed upon which approvals can take. But this a concerted effort required from all three levels of government and we commend the federal government in setting that at national cabinet level a few months ago.
Matthew: And that’s great but ultimately, it’s just inflationary, isn’t it? Because the longer the delays go on, demand pushes up prices, it gets harder to buy a property that people want so desperately and becomes more affordable in the process.
Denita: Absolutely, and this is the concern. We’ve all got now a commitment for change. The issue is about the speed of change and we’re already seeing high inflation and as such we need to get on with the job and implement the changes that everyone has agreed to. But also more importantly we’ve also got to ensure while we’re looking at all those positive changes, we’re not actually exacerbating the issues. That’s why, for example, Master Builders is opposing the current IR laws before Parliament that we say will be a significant constraint on productivity and our ability to meet those housing targets.
Matthew: I wanted to ask you about that. The IR Bill currently before the Parliament, as you say. So, what are the problems with that? Why are you opposed to it? You’ve talked about the general effect there. But is there something specific in it? Is it the rates of pay required? Is it the casualisation? How people start off being treated as casuals have to be offered permanency after six months? What concerns you the most?
Denita: The biggest issue is around how we’re looking at the use of contractors and our system of work is highly reliant on independent contractors, and specialist subcontractors. For residential housing for example there are 40-odd different trades that come onto a site at any one given time and they are all independent contractors or specialist subcontractors. They are all going to be adversely affected by the Bill. Particularly independent contractors. Our self-employed tradies which there are about 260,000 of them around the country. Their capacity to be independent contractors will be significantly curtailed. And we say that is wrong. They don’t want to be employees. It will mean productivity will decline because you haven’t got the flexibility of being an independent contractor. Sure there are some issues around independent contracting but we have sham contracting provisions that could be better utilised. So if that’s a big issue with both the Same Job, Same Pay and independent contracting provisions. Casuals is not great. So we say a culmination of all of those things is a dampener on productivity. As such the Bill which is significant, we’re saying most of it needs to be set aside. There are some matters that can be passed easily that have got support. But the government has taken a blanket view of the economy and tied it up as opposed to resolving these few loopholes.
Matthew: Yes, so more importantly, from your perspective, it’s getting a house built reasonably economically, on time, on budget.
Denita: Absolutely. Spot on. We want to be building and equally, people want to be housed and they want a shop to attend, they want hospitals to support them in a crisis, and they need schools for their kids. And we argue that these IR laws will drive up costs and also dampen productivity and make things a lot slower.
Matthew: Governments whether they’re Liberal or Labor, you think back to John Howard’s WorkChoices and this IR Bill. I mean they’re based on ideology. On party ideology as to where the party is coming from rather than practicality and that’s always the problem with IR, I suspect. We’re too focused on making it right for the base of whichever political party is in power as opposed to the realities of where the world is at.
Denita: Absolutely. Spot on. I’ve been, fortunately or unfortunately, depending on how you look at it in industry associations and an IR specialist now for over 30 years. I’ve gone through three, sorry five major IR changes in that 30 years and the vast majority of it is ideological. WorkChoices went too far. This goes way too far and really, we need governments to listen. I was at a meeting the other day with the building ministers and one building minister said ‘So you’re asking us to look at transition and what happens on the ground on practicalities as well as policy?’ and I said yes that makes sense. And we simply want that if we’re going to look at policy you also look at how it’s going to be implemented in practice at the same time rather than at the last minute.
Matthew: Yeah, absolutely. Alright, that sounds good. Did they take the advice?
Denita: Yeah they did. Let’s just hope we’re going to see a new approach when it comes to the building ministers and that it goes across every other ministerial portfolio.
Matthew: Yeah, indeed. Alright, Denita, thank you for your time today.
Denita: Pleasure, thank you.
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