The Hon. Jim Chalmers MP
Treasurer of Australia
Parliament House
Canberra ACT
16 March 2026
Dear Treasurer,
In recent weeks, you have made it clear that the upcoming Federal Budget will focus squarely on lifting Australia’s productivity — on “raising the speed limit” on our economy.
On behalf of Weld Australia and the thousands of businesses and skilled tradespeople we represent across manufacturing, construction and heavy industry, I welcome that focus.
But if we are serious about productivity reform, we must move beyond rhetoric and address the structural barriers that are quietly eroding output, competitiveness and living standards across Australia’s industrial base.
Because the reality is stark.
Australia’s productivity growth is at its lowest level in 60 years. Growth has stagnated at just 0.5 per cent over the past year, and to reach even 2 per cent annual growth by 2030 (which is still modest by historical standards) we would need to quadruple our current rate.
That is not a cyclical wobble. It is a structural warning sign.
And nowhere is this more evident than in manufacturing.
Manufacturing: A Sector Under Strain
Manufacturing’s contribution to Australia’s GDP has fallen to just 5.1 per cent, a record low and one of the smallest manufacturing footprints in the developed world.
In the year to June 2024 alone, more than 5,100 manufacturing businesses closed their doors. At the same time, the sector contracted by 2.6 per cent over the last year, entering recessionary territory around mid-2024.
These figures are not abstract. They represent lost capability, lost apprenticeships, lost innovation, and lost sovereign resilience.
At the same time, the construction industry presents a productivity paradox. While the number of workers has increased in the past decade, output per worker has reduced. On average, people are working two hours less per year with 25.4% lower output (calculated as construction work completed divided by the number of workers). For example, worker output in 2023 was $180,100, compared with $196,800 in 2018. With demand for skilled workers continuing to outpace the available supply, greater productivity is key to raising worker output.
This is not primarily a labour problem.
It is a systems problem.
The Hidden Drag: Rework Masquerading as Productivity
When low-cost imported fabricated steel or structural components arrive on site non-compliant with Australian Standards and must be repaired, re-welded or reconstructed locally, those hours are recorded as economic activity. But they do not increase value. They simply correct avoidable defects.
If a project should require 1,000 labour hours but consumes 5,000 because low-cost imported product fails to meet Australian Standards, that is not productivity. It is inefficiency forced onto compliant Australian businesses.
At a national level, this distorts our productivity performance.
That is not sustainable economic policy.
Compliance Is Not Red Tape; It Is Economic Infrastructure
There is a persistent myth that Standards and compliance are bureaucratic friction; a cost to be minimised.
In reality, credible conformity assessment is one of the most powerful productivity tools available.
When fabrication is done right the first time, to verified Standard: projects move faster, risk contingencies shrink, insurance exposure falls, lifecycle maintenance costs decline and public asset value is protected.
When compliance is assumed rather than verified, we create false economies; cheaper upfront contracts that become more expensive over decades through remediation, repair and litigation.
For Treasury, this is not merely an industry issue. It is a fiscal discipline issue.
Public infrastructure designed for a 50- or 100-year life cannot deliver value if compliance is declaratory rather than enforced. Whole-of-life costs ultimately land with governments and taxpayers.
If we want to improve national productivity, we must improve first-time-right delivery.
Fragmentation and Licensing: Mobility Matters
A second structural drag on productivity is regulatory fragmentation. Every state and territory operates different occupational licensing systems, overseen by different authorities and often applying inconsistent competency benchmarks. This limits workforce mobility, increases compliance costs for employers, and slows project delivery.
We support national licensing reform, but only if it is built around demonstrated competency, not paperwork.
In welding, certification aligned to ISO standards allows skilled tradespeople to work across jurisdictions because competency is verified, portable and independently assessed. A national licensing framework for trades should adopt the same principle: assess practical capability, ensure consistency, and eliminate duplication.
Workforce mobility is productivity reform.
Standards and Fair Competition
The Productivity Commission recently posed the question of whether Australia should abandon national standards in favour of international alternatives. Our view is clear: the idea is not only impractical, but deeply misguided.
The issue is not which Standards we use. The issue is whether they are being consistently enforced, particularly for imported fabricated products.
Right now, many imported fabricated steel components enter the Australian market without meeting any recognised standard, Australian or international. This not only creates a safety risk but undermines compliant Australian businesses that are doing the right thing.
When overseas suppliers compete on price without undergoing equivalent certification, audit and inspection regimes, we do not have a free market. We have regulatory asymmetry.
Compliant Australian businesses invest in qualified supervision, certified welders, quality systems and inspection processes. If competitors are not required to meet the same bar before steel is erected or installed, we incentivise non-conformance.
Productivity cannot improve in a system that rewards lowest upfront price over verified whole-of-life value.
From Tick-and-Flick to Verified Compliance
Every state and territory already has regulations requiring fabricated structural steel to comply with Australian Standards.
On paper, the framework exists. In practice, however, compliance too often becomes a tick-and-flick exercise. This is because there is no nationally empowered body responsible for independently verifying that fabricated steel (whether produced domestically or offshore) genuinely conforms before it is erected, installed or incorporated into public infrastructure. In effect, we have rules without a referee.
To address this structural weakness, Weld Australia (in collaboration with the Australian Steel Institute and Standards Australia) has established the National Fabrication Authority (NFA), with a pilot currently underway in South Australia. The NFA is designed as an independent, not-for-profit certification and inspection body tasked with verifying compliance to Australian Standards for all fabricated steel, whether produced in Dubbo or Da Nang.
Importantly, this is not new bureaucracy layered onto the system. It is targeted institutional capability; the verification function our regulatory framework currently lacks.
If productivity reform is about removing structural drag from the economy, then closing the gap between regulatory intent and enforceable compliance is a logical starting point.
Standards without verification are aspirations. Verified compliance is productivity infrastructure.
What the Budget Must Address
If this Budget is to genuinely lift productivity, it should focus on structural enablers, not just stimulus measures. Specifically:
- Commit to national trade licensing reform based on competency and portability.
- Strengthen enforcement of compliance for fabricated structural products, domestic and imported alike.
- Align procurement frameworks to recognise verified conformance and whole-of-life performance, not just headline cost.
- Support industry-led certification systems that provide auditable, internationally recognised competency assurance.
These are not protectionist measures. They are productivity measures. They reduce rework. They protect public capital. They strengthen sovereign capability. They allow local businesses to invest with confidence.
A Final Thought
Australia cannot tax its way to prosperity. Nor can it subsidise its way to sustainable growth.
We must build our way there.
That means ensuring that every hour worked generates real value, not duplication, remediation or regulatory confusion.
It means enforcing quality rather than assuming it.
It means aligning national systems so skills are portable, standards are credible, and markets reward compliance.
If we want to lift the economic speed limit, we must remove the structural drag.
Weld Australia stands ready to work constructively with Treasury to advance reforms that deliver measurable, durable productivity gains.
Yours sincerely,
Geoff Crittenden
CEO, Weld Australia
CC to: Dr Dan Mulino, Assistant Treasurer and Minister for Financial Services; Dr Andrew Leigh, Assistant Minister for Productivity, Competition, Charities and Treasury; Katy Gallagher, Minister for Finance; and Tim Ayres, Minister for Industry and Innovation.
About us:
ABOUT WELD AUSTRALIA
Weld Australia represents the welding profession in Australia. Its members are made up of individual welding professionals and companies of all sizes. Weld Australia members are involved almost every facet of Australian industry and make a significant contribution to the nation’s economy. The primary goal of Weld Australia is to ensure that the Australian welding industry remains locally and globally competitive, both now and into the future. Weld Australia is the Australian representative member of the International Institute of Welding (IIW). For more information or to join Weld Australia, please visit: https://weldaustralia.com.au/
Contact details:
Sally Wood on 0434 442 687 or [email protected]
