The cost of letting productivity slip

Despite government investment in housing, 80 per cent of the additional new homes that could have been built will never see a shovel hit the ground said Master Builders Australia CEO Denita Wawn.

Master Builders Australia has released The Cost of Letting Productivity Slip today, which assesses the cumulative impact of positive and negative changes in the industry over the next five years.

Ms Wawn added: “Under the best-case scenario, new home gains have been eroded away by a prolonged labour supply shortage, materials price growth and industrial relations reforms.”

“This outcome will likely worsen when the full package of industrial relations reforms and current union-led pattern EBA negotiations have been finalised.

“The built environment is crucial to maintaining and enhancing our living standards but can only be achieved through productivity growth.

“The delivery of new homes and related infrastructure has been obstructed by ongoing and concurrent challenges, including labour shortages, industrial relations reforms, economic uncertainty, and material price escalations.

“The majority of businesses in our industry are small in size and need more support to manage the increasing cost of doing business which ultimately flows on to consumers.

“It is a productivity maelstrom and cause for significant concern.”

“For the building and construction sector to prosper, and if the ambition to deliver more housing is to be met, addressing productivity constraints is a must.

“We have heard a lot of talk from the government about lifting productivity, but it is now time for action.

“Make no mistake, the recent industrial relations reforms and the abolition of an industry-specific regulator increase uncertainty, legal risk and costs for businesses and consumers.

“It is crucial to enforce existing laws more effectively, condemning those who break them and ensuring rogue operators face the full force of the law.

“Reducing burdensome regulations and ensuring laws operate effectively and consistently is essential to relieving businesses of cost and compliance pressures.

“There must be a better approach to the level of risk involved in building and construction so that it is shared more fairly by everyone in the chain and not simply loaded onto builders.

“The Government must align its policies with the long-term objectives of the industry,” Ms Wawn said.

Over five years, Government housing policies would see:

But productivity barriers over the next five years would see:

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