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In Brief

Low volume of home building but labour shortages linger

ONGOING SHORTAGES of skilled building tradespeople are not the result of a booming housing construction market, according to the Housing Industry Association (HIA). The last two years of new home commencements have been among the weakest in the past decade.

“Australia has just seen its two weakest years of new home commencements in over a decade, meaning these ongoing shortages of skilled trades are not being caused by home building activity,” HIA chief economist Tim Reardon said.

The HIA Trades Report released today provides a quarterly review of the availability of skilled trades and any demand pressures on trades operating in the residential building industry. 

“Despite the low volume of home building, skills shortages are persisting on the back of labour demands from other construction sectors and the wider economy,” Mr Reardon said.

“Excluding the extremes of the pandemic, one would have to go back to before the GFC (global financial crisis) to find trades shortages as acute as they are now.

“Home building is set to gain momentum across Australia as interest rates fall, and this will further add to demand for skilled labour. Activity has already been increasing in Western Australia, Queensland and South Australia on the back of strong population growth, low unemployment, tight rental markets and rising prices, and recovering real incomes,” Mr Reardon said.

“The shortage of skilled trades across Australia persists in every capital city and region.

“An increase in home building will further add to demand for skilled labour and put further upward pressure on labour prices.

“Despite the expected increase in home building, commencements will remain well below those necessary to achieve 1.2 million homes over five years.

“Home building activity has contracted significantly in the Sydney basin, Melbourne and the ACT, but even this has not been sufficient to arrest the rise in ‘trades prices’ nationally.

“The result of these shortages is that the price of trades has increased again by 5.5 percent in the 12 months to March 2025, compared with the broader Australian wage growth closer to 3 percent,” he said.

“Reforms to skilled migration, including a dedicated construction visa, are needed to attract skilled tradespeople from overseas during cyclical peaks in activity.

“Of the 166,830 temporary skilled workers (Visa Subclass 482) in Australia at the end of 2024, only 4,229 were in home building trade occupations,” Mr Reardon said.

“Over the medium-to-long term, a domestic workforce development strategy is required that promotes careers in construction to students, recent leavers and Australians more broadly, male and female, young and old.

“Greater support is also needed for apprentices, the public and private organisations that train them, and the businesses that provide them with supervision and on-site experience,” Mr Reardon said.

 

HIA analysis

Every market continues to have a shortage of skilled trades, with the worst shortages tending to be in the markets showing the strongest improvements in home building activity. Perth (-0.84) and Brisbane (-0.83) had the most acute shortages among the capital cities, with Sydney (-0.39), Adelaide (-0.38) and Melbourne (-0.35) more modest. Across the regions, the most acute shortage was in regional South Australia (-0.67), followed by regional Victoria (-0.55), regional Western Australia (-0.49), and regional New South Wales (-0.27), with regional Queensland (-0.04) very close to neutral.

By trade, two occupations emerged with a surplus of trades for the first time since September 2020: electrical (+0.05) and plumbing (+0.03). Site preparation is also continuing to improve, with a modest shortage of -0.14, while the readings were more acute for other trades, especially bricklaying (-0.93) and ceramic tiling (-0.91).

www.hia.com.au

 

 

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Small business leaders call for forum to shine light on extreme business pressures, drive action

THE Council of Small Business Organisations Australia (COSBOA) is calling for bipartisan support for a government-led post-election Small Business Forum (the Forum).

The Forum would bring together business leaders, peak bodies, politicians and small business owners from across the country in Canberra, where they can discuss and implement practical mechanisms to support Australia’s small business sector.
 
COSBOA CEO Luke Achterstraat said, as the election campaign draws to a close, neither major party had presented compelling policies that would help struggling small businesses weather tough economic conditions.
 
“Throughout this election campaign we have seen a lot of tinkering around the edges but nothing that meaningfully changes the playing field for small businesses, that are up against surging rents, power and insurance costs, as well as complex workplace laws,” Mr Achterstraat said.
 
“It’s important our elected representatives hear first-hand the stories of small business owners and the sacrifices they are making to keep their doors open, keep serving their communities and to keep their staff in jobs. The mental toll on small business owners is crushing and it’s impacting every sector in every corner of the country.
 
“The Forum we are proposing will provide an opportunity for the small business sector to have its voice heard. It’s also a prime opportunity for business leaders, small business stakeholders and policymakers to come together and work out tangible solutions to the significant issues our small business sector is facing.
 
“What we’re proposing is not a talkfest. Urgent action is needed. Our small businesses deserve a fair go and this Small Business Forum is a practical way to bring everyone to the table.”
 
Mr Achterstraat also reiterated calls for the incoming government to reduce the company tax rate for small businesses with an annual turnover of less than $20 million a year from 25% to 20%, providing instant relief that would enable small businesses to grow, reinvest and employ more staff.
 
“As our economic modelling shows, if the small business company tax rate was cut to 20% immediately, it would inject $11.4 billion into the economy over the next five years, with just $800 million in foregone tax revenue. This equates to $10 of growth for every dollar forfeited,” Mr Achterstraat said.
 
“This doesn’t just make sense in terms of ensuring a thriving and vibrant small business sector – it also makes clear economic sense.”

www.cosboa.org.au

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Productivity Commission: Reinvigorating productivity growth is a national priority

LABOUR productivity declined by 0.5% in the September quarter and by 0.8% over the year, according to the Productivity Commission’s (PC) latest quarterly productivity bulletin.

“The immense disruption from COVID-19 inflated a short-lived productivity ‘bubble’ which has since burst. Labour productivity is now back to where it was during the stagnant 2015 to 2019 period leading up to the pandemic,” PC Deputy Chair Alex Robson said.

“Over the medium to longer term, higher productivity growth also underpins fiscal sustainability.” 

Labour productivity dropped in both the market and non-market – meaning government-dominated – sectors during both the quarter and the year.

“The data underscores the point that reinvigorating productivity is a national priority. Even small changes that make the economy more dynamic and efficient can deliver big economic dividends and add up to major improvements in real wages and living standards over time,” Dr Robson said.

“But it’s not all doom and gloom. Today’s economy is, in some ways, stronger than the pre-pandemic economy was. This is most evident in the jobs market, where Australia now has higher labour force participation and lower unemployment,” he said.

The PC’s latest bulletin also compared Australia’s recent productivity performance to that of the United States.

James Thiris, a senior research economist at the PC, said the much discussed "great productivity divide" between Australia and the US – where productivity growth is booming – is not as wide as it first appeared.

Mr Thiris argued this ‘divide’ was partly because Australia and the US report different measures of headline labour productivity, and in addition must be seen in the context of the very different post-pandemic labour markets in the two countries and the different ways they supported workers during the COVID-19 pandemic.

“Australia protected existing jobs and businesses during the pandemic, which reduced disruption but may have prevented some workers from moving to more productive jobs in a quickly changing economy,” Dr Robson said.

“The US supported workers with unemployment benefits, which led to higher unemployment but may have boosted productivity by allowing unproductive businesses to fail.”

www.pc.gov.au

 

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Parliamentary nuclear power inquiry to visit Victoria and South Australia

AS PART of its inquiry into nuclear power generation in Australia, the House of Representatives Select Committee on Nuclear Energy will conduct multiple public hearings in Victoria and South Australia from today until Friday (December 3-6).

The committee will visit Traralgon (Vic), Melbourne, Adelaide and Port Augusta (SA). 

Committee Chair, Dan Repacholi MP, the Federal Member for Hunter, said, "The committee is continuing to hear from residents and community representatives in areas earmarked for potential nuclear plants to better understand the challenges, opportunities, and concerns they face.

“The proposal to build a nuclear energy industry in Australia is one that cannot be considered lightly. As such, the committee is determined to hear from affected individuals and representatives throughout our country to ensure our future energy needs are met, whilst also taking into account the many possible risks.”

The hearings can be accessed online.

The committee will be holding further public hearings in New South Wales and Western Australia later this month. 

Programs for all hearings and further information about the inquiry,  including the inquiry terms of reference, are available on the committee’s website.

Public hearing details

Traralgon

Date: Tuesday, 3 December 2024
Time (approx.): 12:30pm – 4:10pm (AEDT)
Location: The View Function Centre, 140 Burnets Road, Traralgon VIC 3844

Melbourne

Date: Wednesday, 4 December 2024
Time (approx.): 9am – 4:10pm (AEDT)
Location: Cliftons, Level 1, 440 Collins Street, Melbourne VIC 3000

Adelaide

Date: Thursday, 5 December 2024
Time (approx.): 9am – 2:30pm (ACDT)
Location: Hotel Grand Chancellor Adelaide, 65 Hindley Street, Adelaide SA 5000

Port Augusta

Date: Friday, 6 December 2024
Time (approx.): 9am – 11:50pm (ACDT)
Location: Afghan Room, Standpipe Golf Motor Inn, 3-5 Daw Street, Port Augusta West SA 5700

Australia must get migration settings right for tradies

IN RELEASING its Future of the Workforce: Skilled Migrants in Building and Construction report, Master Builders Australia has called on the Federal Government to establish a dedicated building and construction visa pathway.

“Skilled migrants represent a vital part of the building and construction industry and are key to building the homes, infrastructure, schools and hospitals communities are crying out for,” Master Builders CEO Denita Wawn said.

“Australia faces a significant housing crisis with an undersupply of homes and increasing demand for owner-occupiers, renters and social and crisis accommodation. 

“The industry needs an extra 500,000 extra people into our sector over the next few years if we are going to build those 1.2 million homes and supporting infrastructure under the Housing Accord.”

The Reserve Bank of Australia (RBA) confirmed earlier this week that home building was expected to slow further due to rising construction costs with the availability of labour one of the biggest barriers.

“It’s clear our ability to train more apprentices domestically cannot keep up with demand. Skilled migrants who are qualified and ready to go will help relieve some of the workforce pressures,” Ms Wawn said.

“The workforce must be supported to grow in line with demand and become more productive.

“But the current migration framework to bring in skilled migrants is broken. The system must be better to prioritise the skilled workers who are needed to build these homes and support the economy.

“Just like Canada, the UK and New Zealand, Australia needs construction-specific pathways for appropriately skilled migrant workers to ensure quality applicants and the prioritisation of trades workers and occupations that are in significant shortage domestically,” Ms Wawn said.

“It is the only way Australia will meet its building and infrastructure targets and boost its workforce.

“We need the visa and skills recognition process to be simpler, more cost effective and quicker so more suitably skilled migrants can join the building and construction industry.”

Master Builders has called on the Federal Government to:

  • Develop and implement a construction industry-specific visa pathway that makes it quick, easy and cost-effective for migrants with the trade skills Australia needs “to get here and get out on the tools – working in a role for which they are appropriately qualified”.
  • Ensure all trade and trade-related occupations are included in the Core Skills pathway of the Skills in Demand visa.
  • Improve the process and reduce the need for skills assessments for migrants coming from countries with comparable qualification and training frameworks.
  • Ensure the skills recognition process that remains is quick, simple and cost effective.
  • Streamline national licensing frameworks insofar as possible to enable workforce movement and allow for nationally accredited gap training for all licensed trades.

The full list of MBA recommendations can be found by clicking here.

www.masterbuilders.com.au

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Ombudsman urges govt to provide small business certainty over tax breaks

AUSTRALIAN Small Business and Family Enterprise Ombudsman, Bruce Billson, is urging Federal Parliament to give certainty to small business about two crucial tax breaks announced in last year’s Federal Budget.

“Time is running out with just six weeks until the end of the financial year for small business to claim these deductions, but they still don’t know if they’re allowed to make the claims,” Mr Billson said.

“We’re hearing from confused small businesses who just want certainty. I encourage the Parliament to act swiftly to guarantee these small business tax incentives.”

The two measures relate to the instant asset write-off and a tax-incentive for energy efficiency upgrades. 

The legislation would set the instant asset write-off at $20,000 for businesses with a turnover of up to $10 million, allowing them to deduct up to that amount for eligible assets between July 1, 2023 and June 30, 2024.

Federal Treasurer announced in this week’s budget the scheme would be extended to June 30, 2025.

Without legislation authorising the change, small businesses can only write off $1000 for eligible assets and then apply general depreciation rules.

Similarly, the small business energy incentive worth up to $20,000, announced in April 2023 ahead of last year’s budget, will provide an additional 20 percent depreciation for eligible assets that support electrification and more efficient use of energy by small businesses.

The bonus will be available to businesses with an annual turnover of less than $50 million and is aimed at helping them save on energy bills by making investments like electrifying their heating and cooling systems, upgrading to more efficient fridges and induction cooktops, and installing batteries and heat pumps.

“The scheme requires eligible assets or upgrades to be first used or installed ready for use between 1 July 2023 and 30 June 2024, but with the legislation still not passed time is fast running out for small businesses to meet that deadline,” Mr Billson said.

“This uncertainty has highlighted the need for predictability and certainty so a small business can plan in a sure-footed way for important investments that uplift the capacity, the productivity and drive innovation in their business.

“Right now, we need to be energising enterprise. We need to be giving more encouragement for people to turn an idea into an investment and to make that big decision to turn scarce resources into new capability, new equipment, new technology to help with the success of that enterprise and the livelihoods that depend upon it,” he said.

“Having that encouragement to invest in new kit, new plant and equipment, new technology is really an important signal, but what’s needed is the certainty that these tax breaks are real.”

The instant asset write-off is an ongoing incentive with the amount and threshold set each year. The energy incentive is a one-off scheme that ends in six weeks.

Mr Billson said concerned small businesses should seek advice from their accountant, bookkeeper, tax agent or trusted adviser and refer to ato.gov.au for more information.

www.asbfeo.gov.au

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Success in the property today is ‘all about using the tech’ says Domain leader Danielle Harmer

By Leon Gettler, Talking Business >>

TECHNOLOGY has transformed the real estate industry – for consumers and agents alike.

Danielle Harmer, the general manager of product for all of Domain’s agent products, who is also the general manager of the Allhomes area of the platform, said it has now become an essential part of the business,

Compared with 20 years ago, property technology (proptech) is now a crucial part of marketing a property as well as keeping agents in touch with vendors.

“Without it, we would be listing houses in newspapers and hope for the best,” Ms Harmer told Talking Business. 

“A ton of investment is going into proptech, into portals, into all sort of technology that services the real estate industry in Australia.”

Danielle Harmer classifies the technology in two ‘buckets’.

One is around marketing and using the technology to reach the largest possible audience.

The other is in servicing real estate agents.

“There’s a lot of complex processes that go into selling and listing a house and there’s ton of technology that real estate agents use that are workflow solutions that help them look good in front of vendors and run what is a pretty complex process when people are selling houses,” Ms Harmer said.

She said she made extensive use of data every day, looking at how much audience Domain has reached, the conversion on listing portals, the number of listings, the days on market.

“There is so much data in our world,” she Ms Harmer said. “I would say I would use it every day, not only on the technology side to drive our roads and what we use our engineering capacity to develop, but also what we talk about with our clients and what we go to market and write about for our consumers. Facts about the property industry, as well as what we go to, our core business, which is our real estate agent industry,” she said.

Ms Harmer said Domain has launched an artificial intelligence tool called Lead Scope which helps agents identify who in their data base might be looking to sell.

“AI and machine learning have been around for a long time. We’re just seeing that space advance very quickly,” she said.

Many agents were now starting to use the basics of ChatGPT when writing their listing copy for selling a house that is being placed on the market.

She said a large proportion of Domain’s workforce were (tech) engineers.

“Domain is a technology business and a significant proportion of Domain Group’s workforce are the incredible engineers that build on the technology that supports our real estate agents, our banking clients and our consumers,” Ms Harmer said.

She said when there are few selling properties, “which is happening right now in the real estate market”, agents have to use the technology to find listings and to win business. When there are a lot properties on the market, agents will use the technology to get in front of a wider audience.

“If I had to give advice to an agency choosing different technology to use, then you’re going for scalability, you’re going for integration, you’re going to compliance and cyber security and something you know will survive the distance in the technology space,” Ms Harmer said.\

www.domain.com.au

www.leongettler.com

 

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness.

https://play.acast.com/s/talkingbusiness/talking-business-interview-with-danielle-harmer-from-domain

 

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