Master Builders Australia warns productivity issues could hinder government housing targets

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, according to Master Builders Australia CEO Denita Wawn.

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

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

She emphasized that the built environment is crucial to maintaining and enhancing living standards, but this can only be achieved through productivity growth. The delivery of new homes and related infrastructure has been obstructed by ongoing 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,” Ms Wawn said. “It is a productivity maelstrom and cause for significant concern.”

She called for action from the government to address productivity constraints, stating that it is crucial to enforce existing laws more effectively, condemn those who break them, and ensure 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,” Ms Wawn added.

She also emphasized the need for 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 concluded.