Productivity Commission backs builders’ long-standing calls for reform

17 February 2025 

Peak building and construction industry association Master Builders Australia applauds the Productivity Commission for their comprehensive assessment of productivity issues in the residential construction sector.

The review Housing construction productivity: Can we fix it? confirms what builders and the broader industry have long called for: we aren’t going to build the homes Australians need without a focus on improving productivity.

According to the Commission, over the last 30 years, physical productivity has declined by 53 per cent and labour productivity by 12 per cent.

“Governments have focused on alleviating constraints to new supply via changes to planning regimes… but the speed and cost of new building is also a constraint on new housing supply.”[1]

Construction costs have increased by 40 per cent in the last five years and residential build times have increased by up to 80 per cent over the last 15 years.

The report focuses on four key challenges faced by the sector: complex and slow approvals, lack of innovation, lack of scale and workforce.

The impact of government policies on housing construction productivity has also been laid bare with the report shining a spotlight on the impact of slow and poorly coordinated regulatory processes, inconsistency across jurisdictions, and policies that have chilled innovation.

While the report acknowledged it did not go into the impact of recent enterprise agreements, Master Builders would like to see further investigation into the impact of recent industrial relations reforms, particularly with independent contractors and enterprise agreements in the near future.

Construct Your Career Launch

Alongside these recommendations, and while the industry awaits for governments to act on skills shortages, Master Builders Australia has today launched its Construct Your Career Guide.

Construct Your Career is a start-to-finish resource that explains how anyone, no matter their age or gender, can take up a career in the industry, what they can expect on their journey, how much they stand to make in a particular role, and the exciting career opportunities that lay ahead for them.  

The guide features interviews with expert tradies, apprentices, training managers and more that allow prospective workers to hear directly from the people with real world experience in roles across the trades, construction labouring, scaffolding, machine operation, architecture and design, engineering, construction management, surveying, inspecting and estimating and administration roles.  

Quotes attributable to Denita Wawn, CEO Master Builders Australia:

“Productivity is more than an economic buzzword. Every day we drag our heels on tackling the challenges faced in the industry, the longer we drag out the housing crisis.

“Just like the housing crisis, there is no silver bullet to solving woeful productivity in the industry, and it requires a coordinated and comprehensive approach by all levels of government.

“The Commission has put forward sensible recommendations that should be strongly considered by governments.

“Master Builders has made it a priority to do our part in addressing skills shortages and we urge all students, parents, schools and those looking for a career change to check out the guide,” Ms Wawn concluded.

Productivity Commission recommendations:

1. Governments need to make the planning and approvals process for housing quicker and easier to navigate.

2. The National Construction Code has been a positive development and remains sound in principle. However, some aspects of the code and the way it is implemented, including its interaction with state and local government regulations, impose unnecessarily high costs and on building construction.

3. Governments should proactively tackle barriers to innovation in the construction sector.

4. Improving labour market flexibility would help address skills shortages and boost housing supply and productivity over time. Governments could support greater flexibility through continuing to reform occupational licensing regimes, reducing impediments to migration and improving support for apprentices.

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

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