Regional Economic Development

Master Builders welcome govt’s ‘first steps’ in attracting more tradies

MASTER Builders Australia has applauded the Federal Government for taking “meaningful steps” to reduce barriers to growing the building and construction workforce.

Master Builders Australia CEO Denita Wawn said, “Master Builders has long advocated that we must do more to boost our domestic capacity and make it easier for migrants to work in the industry.

“We have worked closely with the government to make these policies a reality and thank Minister O’Connor and Minister Collins for responding to our concerns. If we are going to have any chance of building enough homes we have to prioritise capacity building of the industry,” Ms Wawn said.

“Workforce shortages remain the biggest source of cost pressure and disruption for the building and construction industry.

“Despite a sizeable workforce of 1.35 million Australians, the industry has an annual exit rate of eight percent, and we are only replacing half of those people per year.

“Our recent report into productivity found prolonged labour shortages are reducing industry output by $50 billion dollars and thousands of homes over the next five years.”

In its pre-budget submissions, Master Builders put forward several policy proposals to increase participation in the industry.

“The announcement of Fee-Free TAFE and VET places rightfully recognises the role of not-for-profit industry-led registered training organisations in training the next generation of tradies,” Ms Wawn said.

“It’s now up to state and territory governments to ensure industry-run RTOs are held on equal footing with TAFE.

“Industry-run RTOs, like those run by Master Builders associations around the country, have excellent retention and completion rates, provide pastoral care and support to apprentices that help them find success in their trade.

“We know in the short-term the domestic workforce cannot keep up with demand. Skilled migration represents a vital piece of the puzzle,” Ms Wawn said.

“The investment into prioritising and streamlining skills assessments for potential migrants and those already in the country is welcome news. 

“For many migrants, it is simply too hard to have their professional capacity recognised to work in a trade in Australia, and they are instead in roles that present fewer hurdles to obtain.

“The Parkinson Migration Review found skills assessments or qualification recognition can take up to 18 months and cost nearly $10,000 – that’s time and money people simply don’t have in this economic climate.

“There is still a long way to go and Master Builders will continue to work closely with the government to ensure we make the building and construction industry as attractive as possible.”

www.masterbuilders.com.au

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Master Builders warns about new home starts sinking to 11 year low

THE LATEST building activity data released by the Australian Bureau of Statistics (ABS) has confirmed there is still a long way to go before Australia overcomes the housing crisis.

Master Builders chief economist Shane Garrett said work started on just 163,285 new homes during 2023, a 10.5 percent reduction on the previous year.

“During 2023, detached house starts dropped by 16.4 percent to 99,443,” Mr Garrett said. “This is the lowest in a decade. The final three months of the 2023 quarter saw higher density home starts drop for the third consecutive quarter.

“A total of 62,720 higher density homes were commenced during 2023 overall – the worst performance in 12 years. 

“The mismatch between the supply of new homes to the rental market and demand for rental accommodation is particularly worrying.

“Rental inflation continues to accelerate at a time when price pressures across the rest of the economy have been abating,” Mr Garrett said.

Master Builders chief executive Denita Wawn said this result meant 934,400 new homes have been started across Australia over the past five years.

“Yesterday, Master Builders Australia released its latest industry forecasts which showed we are on track to fall over 110,000 homes short of its Housing Accord target,” Ms Wawn said.

“When it comes to signing new contracts, the pen is not making it to paper as the investment does not stack up.

“Since 2019 we have seen the cost of home building increase by 40 percent.

“Governments need to work to change this. The cost of delivering projects needs to go down and the time to completion must be shortened.

“To achieve these targets, builders are ready to take on the challenge, but clearing the barriers on the road is necessary to get the job done,” Ms Wawn said.

www.masterbuilders.com.au

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Canberra Metro group to build and operate Canberra Light Rail Stage 2A

CIMIC GROUP companies Pacific Partnerships, CPB Contractors and UGL, as part of the Canberra Metro consortium, will finance, design, build and operate the next stage of Canberra’s ‘world class’ light rail system, dubbed Stage 2A, from the city to Commonwealth Park.

The Canberra Light Rail Stage 2A project is jointly funded by the Federal Government and the Australian Capital Territory (ACT) Government. Canberra Metro was awarded the $577 million contract following a single select procurement process, generating revenue of about $227.5 million for CPB Contractors and UGL.

The Stage 2A ‘catenary free’ – or wireless – extension will be delivered under Canberra Metro’s existing public private partnership (PPP) with the ACT Government. 

“The commitment made today in signing this contract represents a significant investment in Canberra by both governments,” ACT Chief Minister, Andrew Barr said. “It is an example of how the National Capital Investment Framework will result in ongoing investment in our infrastructure.”

This is the third Canberra Light Rail package for Canberra Metro, which includes CIMIC’s Pacific Partnerships (sponsor and equity funding), CPB Contractors (design and construction) and UGL (operations and maintenance).

Following on from the initial Stage 1 of the network (city to Gungahlin), Canberra Metro is currently delivering five additional light rail vehicles with onboard energy storage batteries to allow wireless operation, and an expansion of the existing depot.

The project is the next important step in taking light rail all the way to Woden. Canberra Metro funded the PPP finance contribution for the new Stage 2A 1.7km extension through an innovative green loan that recognises the project’s carbon reduction benefits – with Stage 1 operating on 100 percent renewable electricity.

The design and construction scope of work includes delivery of three new stops at Edinburgh Avenue, City South and Commonwealth Avenue, with construction due to start in January 2024 for a four-year duration.

“Canberra Light Rail’s progressive stages are modernising the city’s public transport system, connecting residential areas with employment centres and social and cultural hubs,” CIMIC Group executive chairman Juan Santamaria said. “We are proud to apply the group’s light rail expertise to deliver a convenient and environmentally friendly transport option for Canberrans.”

Pacific Partnerships managing director Simon Nicholls said: “Having been personally involved since the start of Stage 1, I am very pleased that our enduring partnership with the Federal and ACT Governments and Canberra Metro will continue to successfully connect Canberra.

“Our lifecycle approach within the PPP model has proven highly successful. Canberra Metro has mobilised a sustainable finance solution, a reliable delivery contractor and the experienced operations team necessary for a long-term light rail service focused on serving community needs.”

CPB Contractors managing director Jason Spears said: “CPB Contractors is delighted to continue our work to deliver the Canberra Light Rail, which will improve the everyday lives of residents and attract more visitors to the city.

“We are proud to leverage our 70-year history in delivering transformational rail projects across Australia, while we continue to ensure we are maximising training and job opportunities for local people and economic prospects for local suppliers.” Mr Spears was referring to two of the heritage companies of CPB Contractors, Leighton and Thiess.

UGL managing director Doug Moss said, “UGL is involved in more than 150 million passenger journeys across Australia and New Zealand each year, which will grow with the addition of Canberra Light Rail Stage 2A.

“Canberrans have embraced Stage 1 since operations started in 2019, with a service frequency reliability of at least 99.9 percent, delivering services every 5-6 minutes in peak and 10-15 minutes in off-peak.”

www.cimic.com.au

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More homes and tradies needed to capitalise on Defence investment

THE Housing Industry Association (HIA) is warning that more tradespeople -- and homes -- are needed to effectively back up the recently-announced $6.23 billion Defence expansion programs that will boost economic activity in the Northern Territory.

“The announced $6.23 billion Defence spend in the Northern Territory is a welcome commitment that will bring a number of business and economic opportunities to the NT for the construction industry and broader economy," HIA's NT  executive director, Luis Espinoza said.

“To capitalise on these opportunities the NT Government needs to ensure key policies and investment are made now to address current and future housing shortages and workforce skills gaps," he said. 

“The construction industry is already facing significant skills shortages and there is a demonstrated need for more housing right now and those pressures will only increase with the additional investment. “This emphasises the need for targeting policies across Government to address these key matters. This includes opportunities for red tape reduction, first home building incentives, planning reforms to streamline approvals, apprentice grants and support schemes for training providers to deliver and train the future workforce," Mr Espinoza said. “The coordination of these policies is critical as is working with key industry bodies like HIA, to build the capacity of the construction industry to take full advantage of these opportunities. “Industry bodies, and RTO’s such as HIA are ready, willing and have the capacity to train the future workforce of the NT and to bring more apprentices and workers through the door right now. “The NT Government needs to be working closely with the housing industry to build our skills, homes and industry capacity now to be prepared for what the future 2-5 years demand will bring,” Mr Espinoza said.

www.hia.com.au

 

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First Home Guarantee Scheme helps move people into home ownership affirms HIA

THE National Housing Finance Investment Corporation (NHFIC) released its annual report on Australian Government’s Home Guarantee Scheme and the findings are proof that “first home buyer incentives work and should continue to be supported” according to HIA managing director, Jocelyn Martin.

“The Home Guarantee Scheme is an important incentive making it easier for a first home buyer to raise their deposit more quickly and easily and in turn helping them get into their own home faster,” Ms Martin said. 
 
“The report found one in three first home buyers in Australia have been able to get into their first home by accessing the scheme. 
 
“It also found that around 10,860, or more than one third of all guarantees were issued to buyers in regional areas in 2022-23 up from around 7,390 in 2021-22,” Ms Martin said.
 
“The report also showed an increasing proportion of younger buyers participated in the scheme each year since its inception. More than half of all places under the scheme, in 2022-23, were taken up by people under the age of 30.
 
“Since its inception, HIA has been a strong supporter of assistance for first home buyers, to help get Australians into their first home and achieve their home ownership aspirations,”  Ms Martin said.

www.hia.com.au

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Cost of living continues to squeeze housing supply say Master Builders

THE Australian Bureau of Statistics August Building Approvals and Home Lending data is showing early signs of improvement but is still below the adequate levels required to boost much-needed housing supply, according to Master Builders Australia research.

Master Builders Australia CEO Denita Wawn said the Federal Government “must not take its foot off the accelerator” when it comes to tackling the housing crisis and supporting the building and construction workforce to deliver on targets.

“Builders and tradies have a big job ahead of them to ensure we can build enough homes to start tackling rental inflation and meeting our Housing Accord objectives,” Ms Wawn said. 

“We need to ensure tradies are spending as much time as possible on the tools without unnecessary delays and disruptions.

“The cost of building homes continues to be inflated through unnecessary delays and barriers including planning impediments, lengthy approvals processes and high developer charges.

“Worse still, the Federal Government risks magnifying costs and regulatory obstacles with its far-reaching ‘Closing Loopholes’ Bill.

“The IR Bill means businesses will have even more of their time absorbed by compliance and red tape issues – instead of being out there building new homes.

Master Builders Australia chief economist Shane Garrett said August 2023 saw a 7 percent increase in the volume of new home building approvals.

“Both detached houses and higher density home building approvals shared in the expansion up 6.0 and 8.8 percent respectively,” Mr Garrett said.

“However, the volume of new approvals is still considerably lower than this time last year.

“Over the year to August 2022, new home building approvals are still down by 13 percent.

“Detached house approvals have suffered a sharp reversal since their peak during the COVID,” he said.

“The pipeline of higher density home building activity, which is critical to ensuring adequate rental supply, has been weak since even before the pandemic.

“We still need to see a sustained improvement in the volume of higher density home building in order to relieve inflation which is at 15-year highs,” Mr Garrett said.

According to Master Builders CEO Denita Wawn, “The decision by the RBA to hold interest rates for a fourth consecutive month is a welcome reprieve for mortgage holders and renters who are bearing the brunt of the cost of living crisis.

“The effect of the RBA’s tightening cycle is still flowing through to the sector and dampening investment.

“Master Builders has forecast 2023-24 will see home starts decline by another 2.1 percent to around 170,100, well below the 200,000 needed per year to meet population growth.”

www.masterbuilders.com.au

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Construction industry applauds Housing Supply Bills finally being passed by Parliament

THE building and construction industry is applauding today's passing of the Housing Supply Bills by the Federal Government, with the support of the Greens and some Independent members through the Senate.

Master Builders Australia CEO Denita Wawn said, “The combination of the Housing Australia Future Fund (HAFF), the National Housing Supply and Affordability Council, and Housing Australia embeds housing as a core infrastructure priority for the Federal Government.

“Master Builders thanks the Greens, Senator Jacqui Lambie, Tammy Tyrrell and David Pocock who have come out to support the passing of the HAFF.

“The cooperation seen across all levels of government to prioritise tackling the housing crisis is a relief to many doing it tough. Whether it is social and community housing, rental properties, or owner-occupiers, the common constraint is supply.

“The Housing Australia Future Fund legislation is a vital piece in the housing puzzle by encouraging investment in the social and community housing sector," Ms Wawn said.

“Passing this legislation is imperative to delivering the National Housing Accord target of 1.2 million new, well-located homes in the next five years.

“Master Builders acknowledges the tireless efforts of Minister Collins in ensuring this legislation passes and thanks her for the ongoing collaboration with the industry.

“The government has rightfully not bowed to pressure for harmful rental market interventions that would do nothing to boost housing supply.

“We know the biggest handbrake on housing supply is making it easier for new projects to get the green light by kickstarting private investment and reducing development costs and delays," she said.

“To improve housing affordability across the market, all levels of government must continue to work together to implement continuous land supply through rezoning and planning, and taxes on the development and buying process should be reduced,” Ms Wawn said.

Master Builders is part of the National Affordable Housing Alliance (NAHA)of peak bodies, unions, the superannuation and community housing sectors. This alliance supports the objective of enabling a perpetual pipeline of investments that delivers an annual additional supply of housing that leverages taxpayer and private investment. 

The HAFF starts delivering on this framework with a $10 billion investment to deliver 30,000 new social and affordable dwellings in its first five years. The funding is targeted at areas of greatest need including crisis housing for women and children leaving/experiencing domestic violence, improving housing in indigenous communities, specialist services for veterans and frontline worker accommodation.

www.masterbuilders.com.au

 

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