Intergenerational Report highlights urgent need for reform

Today’s release of the 2021 Intergenerational Report highlights the urgent need for governments to take action to improve the take up of productivity-enhancing processes and technologies.

Australian Constructors Association CEO Jon Davies said the report sends a clear message that Australia’s productivity performance needs to improve.

“The construction industry, Australia’s third largest, presents a real opportunity for productivity gains,” Mr Davies said.

“Tasked with the critical role of rebuilding the economy, the opportunity for reforming the construction industry is huge.

“Every dollar spent on projects has a multiplier effect. It directly results in increased employment by the contractors and consultants engaged in doing the work, it increases the demand for goods and services required to build projects and it results in increased spending by the new workers employed.

“However, productivity growth in the construction industry has trailed other significant industries by 25 per cent over the last 30 years.

“If we could just halve the gap in productivity growth, we could be constructing an extra $15 billion of infrastructure every year for the same level of expenditure and employ an extra 15,000 people.”

The Intergenerational Report outlines government policies and institutional settings as playing an important role in lifting productivity and ensuring businesses take full advantage of new innovations and technology.

“This could not be truer for the construction industry,” Mr Davies said.

“Currently, the industry’s focus is just on staying in business from one project to the next and in this environment it can be little surprise that innovation is not a priority.

“There is only one industry that performs worse than construction when it comes to digital innovation and that is hunting!

“Government and clients need to move away from a focus on procuring based simply on lowest tender cost and instead consider overall value and options for innovation.

“Reform of the magnitude required can only happen through greater collaboration across all levels of government that is coordinated at a Federal level and in consultation with industry.”

The Australian Constructors Association is the representative body for contractors delivering vertical and horizontal construction as well as providing construction services.