HIA calls for review of government constraints on housing productivity
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The Housing Industry Association (HIA) has urged for an urgent review of government-imposed constraints on housing productivity, citing significant costs added to new home construction.
Key points:
- HIA’s Chief Economist Tim Reardon states that up to half the cost of a new house and land package is due to government taxes, fees and charges.
- Reardon argues that constraints on the industry reflect government impositions rather than industry inefficiency.
- Recent National Construction Code measures will add around $25,000 to the cost of a new home, despite cost/benefit analyses recommending alternative options.
- State government taxes on foreign-owned building companies are described as a “worst ‘own goal'” that prevents development of new homes.
- Barriers in design rules, approvals processes, and financing arrangements impede productivity benefits from prefabricated building.
Reardon emphasized that the Australian detached home building industry is highly efficient, with a workforce largely engaged as subcontractors paid by task completion rather than hourly rates.
He called for an inquiry into sector productivity to highlight government-imposed constraints that cause delays, add costs, and reduce labour productivity.
The HIA also pointed out common misconceptions regarding productivity measurements in house building, noting that ABS statistics on direct employment by building businesses don’t include typical onsite trades.
Reardon concluded by suggesting that the rise in the number of tradespersons likely reflects growth in mining and public infrastructure sectors, not just the building industry.
The association’s statements underscore the complex interplay between government regulations, industry practices, and housing affordability in Australia.
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