Productivity Commission exposes the uncomfortable truth of construction industry productivity decline
Urban Taskforce Australia CEO, Tom Forrest, said that today’s release of the Federal Productivity Commission research paper confirms the massive impact that the unions, burdensome planning, and building construction regulation has had on housing supply.
In the past 30 years, the productivity in the construction industry has fallen 41% behind compared with the rest of the economy.
The paper highlights the industry constraints on productivity:
- Complex slow approvals, both at the planning stage and also the building approvals stage (construction certificate) needed to allow construction to commence
- Lack of innovation – a clear reference to over-zealous building design rules like the Apartment Design Guidelines in NSW, along with heavy handed building regulators which together, have stifled innovation in this critical sector
- Lack of scale – too many under-skilled, under-capitalised firms who struggle with the ever-changing regulatory world of our industry
- Workforce issues – the Productivity Commission has called out the Commonwealth for failing to recognise the catastrophic impact of their immigration policy leaving skilled construction workers off the essential worker list for so long. Clearly, the iron grip that the CFMEU has had has resulted in rising labour costs which have not been matched by improved productivity. In fact, quite the opposite.
To read the full release, click here
