21 February 2025
Master Builders calls for the next Federal Budget to focus on laying the foundations for economic growth by unlocking building and construction industry capacity and tackling entrenched inflation and declining productivity, which is currently holding Australia back.
The industry which employs over 1.3 million Australians and is made up of around 450,000 businesses, more than any other sector, has been left unsupported with policies dragging the industry backwards.
Earlier this week the Productivity Commission revealed the industry is producing half as many homes per hour worked compared to 30 years ago.
Master Builders CEO Denita Wawn said: “A strong building industry means a strong economy. For every dollar invested in the building sector, three dollars are injected back into the Australian economy.
“Productivity is more than a buzzword. It is the key to lowering the cost and time it takes to build homes, roads, schools and hospitals.
“Productivity gains are the central driver of improvements in living standards and industry capacity over time.
“The next Budget should expand the size of the National Productivity Fund to include other areas of regulatory reform including occupational licensing.”
The Australian economy grew by only 1.5 per cent in 2023–24, the weakest annual growth (excluding the COVID-19 pandemic) since 1991-92.
While the broader economic inflation battle is inching towards being overcome, inflation in the building and construction industry remains entrenched.
Rents rose 6.2 per cent over the 12 months to December and is one of the economy’s worst sources of cost pressures.
Housing-related inflation must be controlled, and this requires a focus on the supply side of the economy.
“The housing crisis is being felt strongly by people all around the country.
“The building and construction industry is central to resolving the housing crisis with the residential, commercial and civil sectors all playing a role to build the communities Australians need.
“While governments are starting to make some inroads in planning reform and social housing investment, the very businesses that will be relied upon to deliver on the 1.2 million new homes target continue to be left in the lurch,” Ms Wawn said.
Master Builders, in its September 2024 forecasts, anticipated that 1.03 million homes would be built in the five years from 1 July 2024. This is a 166,000-shortfall relative to the 1.2 million national target.
The shortfall will be caused by a confluence of factors, including labour shortages, high material costs, delays in planning and building approvals, slow land release, delays in critical utilities and infrastructure and increased compliance costs.
Over the last five years, building costs have soared by 44.1 per cent.
“We know what the problems are and how to fix them and the next Budget is the opportunity to get on with it.
“Master Builders supports the Government’s new apprentice incentives of $10,000 but the Budget needs to go further with incentives for employers to offset the significant cost that comes with employing and training an apprentice.
“Ninety-nine per cent of all businesses in our industry are small businesses. The time it takes for these businesses to recruit and train staff, implement regulatory and legislative requirements, manage a business and keep up with changing policy priorities is significant,” Ms Wawn concluded,” Ms Wawn concluded.
Master Builders Australia submits the Government focuses on:
- Lifting productivity
- Building more homes for Aussies
- Overhauling bad workplace laws and cleaning up the CFMEU
- Growing and strengthening the workforce
- Supporting business development
- Ensuring safety and wellbeing in the workplace
- Getting the tax structure right
- Removing unnecessary regulatory burden
- Investing in a sustainable future
- Ensuring fairness and security for all in the construction chain
- Building Defence capabilities
- Enhancing the Federation
Full submission and specific policy recommendations can be found here.
Media contact: Dee Zegarac, National Director, Media & Public Affairs
0400 493 071 | dee.zegarac@masterbuilders.com.au