This article is from the Australian Property Journal archive
A NEW rating system for federally funded projects would hold builders to account and boost productivity, according to the Australian Constructors Association, as the construction industry lads behind other major industries and faces a critical shortage of 105,000 workers.
The Australian Constructors Association’s major policy reform idea, dubbed “FAIR” – the Future Australian Infrastructure Rating – is part of a paper released ahead of next week’s Jobs and Skills Summit. It pinpoints the federal government in its role as a major source of infrastructure funding as being able to significantly promote reform in the construction industry, with is the country’s third-largest.
CEO of the Australian Constructors Association, Jon Davies, said the FAIR would provide a way for the federal government to improve productivity this the need for significant change to existing project governance or funding frameworks or prescribing how projects are to be delivered.
“The silver bullet is improved productivity – doing more with less.
“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.”
He said a simple way of implementation would be to include the initiative in the next iteration of the National Partnership Agreement.
FAIR would 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”.
The construction industry contributes 8% of GDP but its productivity growth lags other major industries by 25%, according to 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 five reform areas identified are maintaining full employment and productivity, boosting job security and wages, lifting participation and reducing barriers to employment, delivering a high-quality labour force through skills, training and migration, and maximising opportunities in the “industries of the future”, such as driving net zero emissions outcomes.
The solutions to the industry’s challenges are “well known and widely supported”, according to the Australian Constructors Association, but what has been missing is a mechanism to ensure they are implemented.
Davies said the industry needs a disrupter.
“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.”
