Interview with Sarah Morice, ABC News Radio

Event: Interview with Sarah Morice, ABC News Radio
Date: 23 September 2024, 5:40pm AEST
Speakers: Denita Wawn, CEO Master Builders Australia
Topics: Future of the Workforce Report, Labour shortages

E&OE

Sarah Morice, ABC NewsRadio Host: Now, Australia’s construction industry is short 130,000 workers. That’s according to a new report by the Master Builders Association. It says that amount will be needed in the next year alone, on top of what’s called natural attrition, and the only way to get there will be through some big reforms. Denita Wawn is the chief executive of Master Builders Australia and joins us now. Denita, good afternoon.

Denita Wawn, CEO Master Builders Australia: Good afternoon.

Sarah: So this report says the extra 130,000 workers will be needed on top of the normal amount required to replace those leaving the industry or retiring. So how many do we actually need then?

Denita: Well, we think it may well be as close to about 250,000 this year, at least in the next 18 months. We have an interesting cycle at the moment where civil, commercial and residential across the country, both city and regions, east and west, are in high demand. And that means that if we don’t get replacements soon, the cost of building homes, which has already gone up by 30 or 40% over the last five years, will stay at those high prices, and that certainly, we certainly also won’t meet the 1.2 million housing target that governments have set for the next five years.

Sarah: Why are we in such an acute shortage? We’ve seen many businesses going under with fixed price contracts. Is the industry just too difficult to stay afloat here?

Denita: No, I don’t think so. I mean, interestingly enough, yes, we have had some insolvencies with those fixed price contracts. That was an anomaly through covid. But the insolvency numbers are actually outweighed by the number of businesses establishing. There’s a lot of work on and this really comes down to the last 40 odd years, where we simply have not encouraged enough people to undertake an apprenticeship in a construction trade. And as a consequence, that natural attrition, a lot of people from the baby boomers are retiring, and we simply have not made up the numbers. And then, when you look at completion rates on average, are only 50%, we have a significant problem. And of course, women only make up 4% of the trades. So there’s a whole raft of recommendations we’ve made to see if we can turn this around.

Sarah: And where do you think these workers could come from? Are we going to have to rely on migration?

Denita: Certainly, in the short term, we will need to we’ve called in this report for a tradie visa to be accompanied by far more focus on ensuring that people can have their qualifications recognised by state, state officials, as well as their gap training done quickly. And that certainly is critical. But the longer term is about more apprentices, and both men and women and of all ages.

Sarah: How do you attract young apprentices to the building industry? Because there are so many industries at the moment who want their share of the young, new workforce that’s coming through.

Denita: Well, I think there’s a number of key things that certainly there is an awful lot of work underway. We still think that that is decades in the making. We know that if you go and do vocational education and training, particularly in a trade, through an apprenticeship, you get paid for training, as opposed to incurring a HECS debt, and you get fairly well paid in the building and construction industry. So there’s a range of positives there. And of course, we’ve got the issue about AI. I certainly recognize that AI is going to take over more professional jobs than they are on those trade jobs in the coming decades. So, a range of positives there. But certainly, we know as an industry that we also need to attract and be on the top of our game in terms of attracting people as well.

Sarah: And you were talking there about migration, probably needing to be the source that you go to first for the next little while, at least, there are a lot of talks from both sides of government at the moment about cutting migration. Would that be a problem for you guys?

Denita: Well, we’ve said to both major parties that if there is an intent to cut migration for the housing crisis, it is no use cutting it for trades when we need more migration to actually build those homes. So our pursuit is very much that trades are a priority in terms of those migration figures, we know we’re competing in an international market. New Zealand, UK and Canada all have a specialist trade visa where they are helping people through the quagmires of the system, and we certainly think we need to do likewise.

Sarah: And if we can’t get these workers, what does that mean for our housing targets? We know we’re desperately short of housing already.

Denita: Well, unfortunately, our forecast at the moment suggests that we’re going to fall well short, about 200 – 250,000 homes over that five year period of the target of 1.2, a lot of that is to do with the shortages that we have, and so it is critical that government at all levels prioritize skills. We’ve certainly heard some very positive moves from both major parties federally and the states are starting to focus on it as well. Nevertheless, we need a holistic, prioritised, targeted, approach from all levels of government.

Sarah: Denita, thank you for letting us pick your brain this afternoon. Much appreciated.

Denita: Pleasure. Thank you.

Sarah: Denita Wawn there who is the Chief Executive of Master Builders Australia, with this new report today saying the construction industry short, at least 130,000 workers.

Media contact:
Ben Conolly
Senior Advisor, Media & Public Affairs
0423 151 666
ben.conolly@masterbuilders.com.au