Improving the productivity of the nation’s third largest industry, construction, will provide the building block for strengthening Australia’s economic performance according to the Australian Constructors Association in a new paper released today ahead of next week’s Jobs and Skills Summit.
Releasing details of a new ratings initiative to unlock massive productivity gains, the Australian Constructors Association proposes the Federal Government use its buying power to drive outcomes that will see projects delivered within the confines of today’s constrained labour market while charting a more sustainable course for the industry that currently accounts for a quarter of all insolvencies.
Australian Constructors Association CEO Jon Davies said the industry needs a disrupter.
“The construction industry contributes 8 per cent of GDP and yet its productivity growth lags other major industries by 25 per cent,” said Mr Davies.
“The opportunity of closing this gap is enormous. Just halving this productivity gap would result in savings of $15 billion annually and, importantly, ensure the industry is positioned to deliver the record pipeline of projects.
“Improving productivity performance is not a matter of choice. The industry is facing a critical workforce shortage of 105,000 workers within the next 12 months and with low unemployment there is no volume of migration or training that will solve this challenge.
“The silver bullet is improved productivity—doing more with less.”
The Australian Constructors Association says the solutions to the industry’s challenges are well known and widely supported but what has been missing is a mechanism to ensure they are implemented.
The Australian Constructors Association’s major policy reform idea, dubbed FAIR—the Future Australian Infrastructure Rating, pinpoints the Federal Government in its role as a major source of infrastructure funding as being able to significantly promote reform.
“FAIR provides a way for the Federal Government to do this without the need for significant change to existing project governance/funding frameworks or prescribing how projects are to be delivered. A simple way to do this would be to include the initiative in the next iteration of the National Partnership Agreement.
“FAIR is designed to rate federally funded projects on how well they performed against a range of key reform areas including increased participation. Specifically, it will incentivise adoption of the Culture Standard developed by the Construction Industry Culture Taskforce to ensure women have equal opportunities and equal pay in construction and improve the mental health and wellbeing of the industry’s workers.
“All proponents seeking federal funding for projects would be required to submit details of how they intend to achieve improved project outcomes and on completion they would be held to account.
“FAIR is the long-awaited disrupter of the construction industry.
“FAIR would bring forward a step change in productivity, innovation and industry practice by instilling collaborative behaviours, focusing on quality outcomes and sharing lessons learnt.”
The Australian Constructors Association is honoured to represent the construction industry at the Jobs and Skills Summit from 1-2 September 2022. Australian Constructors Association CEO Jon Davies will be available for media comment.
View the paper A FAIR idea for the Jobs and Skills Summit.