According to Master Builders Australia, productivity in the industry has fallen eighteen percent over the last decade, despite the cost of building a home rising by more than forty percent, and they want the federal government to unlock that productivity now through a whole bunch of suggestions that they're calling bold practical reforms that will make a real difference. Well, Anita Warn is the CEO of Master Builders and she's on the line. Anita, thanks for your time.
Good afternoon, Bill.
Bold practical reforms now, that's a lot to ask of any government. They tend to be very cautious when it comes to reinventing the wheel. What are they Well, I think.
First and foremost, it's great to hear the Treasurer today at the Press Club talk about the fact that he wants to see productivity as a cornerstone of their government of this term. So that's a good start. We're cognizant of the fact that we've got an industry that has been burdened by significant increasing in red tape, in time waiting for approvals and so forth. That time is money in the building game. That means that housing has become
more expensive. So from our perspective, it's all about governments streamlining processes without necessarily adversely impacting quality or safety. We want to see progress in terms of enabling infrastructure so that gets done more effectively and more efficiently. We want to see tax reforms that actually encourages those businesses that have good business practice and at the same time regulators pulling up those who are doing the wrong things, so
we then have a level playing fields. So the other types of things that we've discussed. We've had a Productivity Commission that has said that our productivity is in a really bad shape and things have got to change for us to be able to build for all Australians.
Whether it's a personal development. And we've seen a couple of stories in the paper recently. They pop up quite regularly actually about people who build homes or renovate homes and the neighbors are upset and the councils called in and all these problems. But there's also the large scale projects as well, where whole suburbs object to various things, but the excuse is always, well, you know, we want
to make sure it's done right. But I think what you're talking about is yes, of course, but can't we speed up the process by which we adjudicate these things? What is the hold up? Is it simply people on the ground that are able to process this? Is it staff?
It's staff. It is the laws that make things complex rather than streamlined planning approvals where there's a one stop shop, for example, for all things to be approved as opposed to multiple agencies. You hear stories from our builders that they're getting one story from you know, Sydney Water for example, but another different story from the the road transport in terms of creation of new suburbs that are contrary to
each other. You've got a planning portal that has all sorts of problems in it that we know the new Southwest government is trying to fix. We have a lack of staff in local council in terms of doing proper property inspections, planning and so forth. The list goes on, and everyone knows what the problems are, everyone knows what the solutions are. What we now need is a concerted effort across the country to actually get everyone actually working
in sync. That's where the problems are. There's no one working.
In sync right And I assume a lot of these things you mentioned Sydney Water for example, are on the larger scale projects obviously, and they're the ones where, let's be honest, interested in most because they're going to provide more housing more quickly.
That's right, Bill. But interestingly enough, it's not just about
new urbs. It's also about infield projects as well. We know there's a lot of interest in that Mintal ring with medium density and high density, but to do that you need to ensure that the infrastructure that was there for us, say you know, twenty detached homes could actually accommodate one hundred units, and so a lot of the time there does need to be that critical infrastructure upgrades even before the builders can come in and start constructions.
So there is a lot of components to building and building more homes to meet our housing targets. And we just need to get this sequencing right because when you've got a pace of land that is underutilized or not utilized, then that is costing someone money and they in turn will then pass it on to the homeowner.
Now, look, I'm one of many people talking back now about small scale projects. We've had plans for a renovation sitting on a shelf years now, I've got my own reasons for that. But the point I'm making is that building is becoming increasingly difficult and costly. And we've got builders,
on the one hand saying their margins are shrinking. That it's in some cases they're taking on projects that are not actually making them any money, but they want to keep their company and their employees still ticking over until they can actually start making a profit on other projects. But at the same time, of course, the people who are commissioning those projects are finding it increasingly difficult to afford them. How can we make those two ends meet?
Spot on? Bill? And I think I'm like you, I've got plans that have been sitting on a shelf for quite some time. I think that the issue is really a couple of things. Well, first and foremost, we need to have an economy where inflation is kept at baying interest rates are low. We're starting to see that slowly happen where people can naturally afford it. But if you think about it, the building of a detached home or renovations has increased by over forty percent in the last
five years, and that's simply unsustainable. And so people are just they want to build but they can't afford to build. So the thing we've got to look at is do we have enough skilled people to do the work. The answer is no, so we're focusing on our apprenticeships. But we've said to the government more needs to be done around skilled migration for trades in building construction. We're competing in an international market and we don't provide priority pathways
for building construction trades. We also know that the builders with fixed price contracts quoting you know, sometimes twelve months in advance, and I've seen a skyrocketing in prices. So there's got to be a greater meeting of minds between clients, between and banks and the builders about what is a reasonable price. You know, we encourage building does not go and sign contracts when you know you're going to operate at a loss. People have been burnt and that's how
we get higher in solvencies. But you're right, they want to keep the business sicking, Nobus. It's not just about the builder. It's the forty odd trades that they support in ongoing building in their.
Business, and a lot of them are very very small operators in some cases sole traders of course, and trying to feed a family week to week. Now just quickly before you go, Danita, if you don't mind. The federal government is now free to crack down on the CFMEU after this High Court challenge, a constitutional challenge was dismissed this morning. That announcement was made by Chief Justice Stephen Gagler. All six grounds of the challenge rejected. How does the
master builders greet that information? And does it make it better for Mark Irving the administrator to get things done?
Yeah, Bill, I was in the High Court itself this morning to hear that decision handed down. It was a relief. To be honest, industry has needed certainty. The High Court action has meant that there's been a lot of hesitancy by people to come forward because they weren't quite sure whether to support the administrator or support the executives in exile. That puts a stop to that. We can now all
get focused on cleaning up the union. But I think more importantly for us is that we're seeing from the evidence that's come out of the work that Mark has undertaken as administrator, is there are some bad actors in our sector, whether they are unions or people that own businesses in the industry. Enough is enough. We've got to clean up our actors and industry and ensure that everyone is undertaking things lawfully and this gives us the opportunity. It's a historic moment today.
Well said and thank you very much for your time today, Adnita Warn pleasure.
Thank you.
Anita is the CEO of the Master Builders Australia.