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Building Construction, Industrial Relations

Building and construction helps keep economy afloat…for now

Master Builders Australia 2 mins read

Responding to the latest National Accounts, the inextricable ties between construction activity and the broader health of the economy are once again on display but proposed draconian industrial relations laws risk upending the industry and eroding economic growth says Master Builders Australia CEO Denita Wawn.

 

The economic grew by 0.4 per cent over the June quarter. Construction increased 2.2 per cent and was the strongest contributor to gross value added growth.

 

Ms Wawn said: “Productivity is the key driver of economic growth and the IR omnibus Bill currently before parliament does nothing to foster higher productivity or to reduce the costs of running a business.

 

“Economic growth is essential to our members’ business success and the ability to meet the residential, commercial and civil construction needs of the community.

 

“A stronger building and construction industry means a stronger Australia. Every $1 million worth of building activity supports around $3 million in activity across the economy. This multiplier effect is vital to keep our economy away from the risks of falling into a recession.

 

“The building and construction industry accounts for around 10 per cent of GDP and is made up of over 445,000 businesses, many of whom are small businesses who are doing it tough in the midst of a cost of living crisis and a profitless boom.

 

“We need to back small business and make it easier for them to succeed, we need to invest more in skills, cut red tape, tackle low productivity and high inflation, and critically, ensure that industrial relations laws support growth in our industry.

 

“Self-employed tradies and subbies have worked hard to establish their businesses, build strong relationships, and enjoy the freedom to choose how they operate.

 

“Make no mistake, the rights of independent contractors to be their own boss is under threat. The Government’s ‘closing the loopholes’ Bill will not foster business growth, will not create new jobs and will not increase productivity.

 

“Wrapping a rope of unnecessary, complex, ambiguous, and costly laws around the industry will do nothing to speed up our efforts in tackling the housing crisis.

 

“We need to increase capacity and flexibility of the building and construction industry not turn people away because it’s all too hard.

 

“This Bill is not about closing loopholes but opens the door for the union movement to extend their stranglehold of the industry to new sectors including the residential sector.

 

“Minister Burke needs to abandon this extreme overreach and work alongside other Ministers and members of Parliament who are working constructively with the business community to move Australia forward,” Ms Wawn.

 

Background

While total construction output was unchanged during the June 2023 quarter, this was achieved by using fewer inputs than before. Effectively, the building and construction industry has been doing more with less.

 

The 2.2 per cent rise in construction activity was driven by:

  • 3.5 per cent rise in construction services driven by trades, and land development and sub-division services;
  • 1.2 per cent rise in heavy and civil engineering construction due to increased infrastructure project activity; and
  • 0.1 per cent rise in building construction driven by non-residential construction.

 

However, dwelling investment fell by 0.2 per cent. House construction fell, with ongoing constraints on labour further extending average completion times confirming importance of attracting more people to the industry and maintaining a flexible workforce.

 

Media contact: Dee Zegarac, National Director, Media & Public Affairs

0400 493 071 | dee.zegarac@masterbuilders.com.au

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