The Australian Constructors Association has released a new paper ahead of next week’s Jobs and Skills Summit, with details of how its ratings initiative could unlock extensive productivity gains in the construction industry.
The paper discusses how improving the productivity of the construction industry – the third largest industry in the nation – is the first step in strengthening Australia’s economic performance.
Australian Constructors Association CEO, Jon Davies, said the industry is overdue for a disrupter.
“The construction industry contributes eight per cent of GDP and yet its productivity growth lags other major industries by 25 per cent,” Mr Davies said.
“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.
The Australian Constructors Association said 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.
According to Mr Davies, improving productivity performance is no longer a matter of choice.
“The industry is facing a critical workforce shortage of 105,000 workers within the next twelve months and with low unemployment there is no volume of migration or training that will solve this challenge,” Mr Davies said.
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.
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,” Mr Davies said.
Mr Davies said 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,” Mr Davies said.
“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 would bring forward a step change in productivity, innovation and industry practice by instilling collaborative behaviours, focusing on quality outcomes and sharing lessons learnt.”
