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Building Construction, Industrial Relations

IR Bill risks worsening inflation in housing sector

Master Builders Australia 2 mins read

Today’s release of monthly inflation data from the Australian Bureau of Statistics confirms the critical role the building and construction sector will play in tackling stubbornly high inflation in housing.


Australia’s annual inflation rate rose to 5.2 per cent during August with a 7.8 per cent increase in rents. Housing and rental pressures are one of the biggest sources of cost pressures across the economy.


The rental market continues to be hurt by a prolonged drought in new apartment building and the negative consequences of rising interest rates.


Master Builders Australia CEO Denita Wawn said: “As households are left bitterly disappointed with the news that inflation has risen, you have to ask why on earth the Government would undertake to increase costs even further with extreme industrial relations reforms.


“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.


“While the cost of newly built homes continues to ease with material costs softening to August 2021 levels, it is still well above the average. Efforts are still needed to put downward pressure on the cost of building.


“With 98 per cent of businesses in our industry being small in size, we need to lift productivity and make it easier to do business by reducing unnecessary costs and regulatory barriers.


“Small businesses do not have HR departments so industrial laws need to be clear and simple, so everyone knows where they stand.


“The industrial relations Bill currently before Parliament will require employers to spend far more hours working on compliance and red-tape with greater uncertainty and increased legal risk making it harder for employers who need to estimate costs in advance, make future business plans or tender for new work.


“This Bill will not sustainably lift people’s wages, hampers our efforts to fix the housing crisis and threatens the viability of independent contractors and self-employed tradies.


“Master Builders, along with major employers around the country, continue to implore the Government to scrap this Bill and go back to the drawing board,” Ms Wawn said.


Engineering construction activity data was also released by the ABS today which saw a 2.1 per cent expansion in the volume of engineering construction work done.


Ms Wawn added: “The strength of engineering construction activity is one of the main reasons why Australia’s GDP growth rate is still on the positive side of the ledger.


“Investment here is crucial to building our economy’s productivity performance and deepening our capacity to expand in the decades ahead.


“Lifting our economy’s productivity performance is important because the deterioration seen in today’s inflation figures is related to our inadequate supply capacity and productivity underperformance.”


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

0400 493 071 |


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