[+] Data Disputes Big Build to Blame for Worker Woes

There is work to be done, but there are no workers. For many developers during the past year, finding sufficient labour to build projects has been, to put it mildly, a major challenge. Across Australian, a slew of builders and subcontractors have shut up shop, unable to manage project timeline and cost blowouts. And many who’ve stayed have followed better pay, signing on to major projects by big developers and government. Developers dealing with increased costs and delays also have the headache that the pipeline of government projects won’t reduce soon enough to free enough labour for other builds. “It is the number one issue our members say is a risk to good project outcomes,” Master Builders Australia national director for industry policy Alex Waldren says. ▲ Work under way on Victoria’s Metro Tunnel project, one of the state developments often cited as a key competitor for labour. Where the work is Infrastructure Australia tracks the level of demand for construction workers across the categories of projects in Australia. State and territory governments supply the organisation with data about what is in their pipelines. “It’s a significant body of research that we do for the national cabinet,” Infrastructure Australia policy and research chief Steve Brogan says. “We have data-sharing arrangements in place with all the state and territory governments on their forward infrastructure pipelines, as well as leveraging data from private sector sources.” In its 2023 Infrastructure Market Capacity Report, released in December, Infrastructure Australia found that 74 per cent of construction demand is for that category of project—government infrastructure or private sector. The remaining 26 per cent covers areas such as defence, mining, heavy industry, and smaller individual residential or renovation works. That 74 per cent is equivalent to $690-billion worth of work, mostly in infrastructure projects, large private building projects and large privately funded utility projects. Public infrastructure projects account for just $230 billion of the $690 billion—and $210 billion of that is transport projects. “[The $690 billion] is broken down into $427 billion on large-scale buildings—buildings that are generally more than $35 million in construction costs,” Brogan says. “[With] the other components, $210 billion is in transport projects and $53 billion in utility projects.” ▲ Much of the $690 billion demand for, and uptake of, construction labour has come from the private sector for projects costing more than $35 million. What that means is that it isn’t government infrastructure projects, such as the Suburban Rail Loop, the Inland Rail project or Melbourne’s Metro Tunnel project, accounting for the bulk of the demand for construction workers. “It’s really about the competing ambitions across the various sectors,” Brogan says. “So the building space takes the lion’s share—a lot of those buildings are for housing.” But, Brogan points out, many of the companies able to work on large government projects are often the same ones working on large private projects. “It is the same workforce, generally speaking, used to build a hospital or a school or rail,” he says. “It’s the construction sector more broadly that doesn’t have the supply it needs, particularly from a workers point of view, to keep up with this heightened demand.” Infrastructure Australia said the expected worker shortfall for this year was 131,000. Shortages are most acute in the Northern Territory, Central Queensland and Murray River and Mid North Coast of New South Wales. ▲ Master Builders Australia’s Alex Waldren says there are barriers for migrant workers entering the construction labour workforce. Finding a way out Waldren says better management and increasing the workforce are key. “There needs to be better sequencing of the rollout of projects, so we can manage what’s ahead of it,” she says. “And there also needs to be an appetite for people to explore migrant workforce opportunities as well.” Currently, many migrant trade-qualified workers aren’t able to enter Australia and easily take up work without re-qualifying. “That’s one of the biggest barriers, skills and qualification recognition, in terms of the migrant workforce being able to get up and going here,” Waldren says. She says many migrants resort to work such as rideshare because they don’t have the immediate funds and time necessary to re-qualify. Charter Keck Cramer head of research Richard Temlett agrees and says it is a policy issue. He says that the focus on attracting migrants with university degrees would not fix the problem as the skills Australia needs are not just for university-qaulified workers, such as trades and prop tech. Migrants are just part of the solution of course. Waldren says a lack of organisation nationally also throws up unnecessary barriers to getting more workers in the industry. “We haven’t even got this right in terms of the licensing arrangements,” she says. “We do have a national mutual recognition agreement and framework for licenses for occupations—in some states there’s a free flow of skills between states, in others there isn’t. “For example, Queensland hasn’t adopted this automatic mutual recognition legislation so there’s no free flow to that state—and Queensland has the most onerous trade licensing process in the country.” ▲ Inside a tunnel in Brisbane’s Cross River Rail project. Brogan says the solutions are many and were laid before the Government with 14 recommendations in its December report. “We need a national infrastructure workforce strategy and that’s something that needs to be developed,” Brogan says. “We need to grow our higher education pipeline and to ensure that the people who come to us from overseas, who have the right qualifications in their homeland, can get a job. “We also need to ensure that we have a steady supply of apprentices and trainees, and that those people are credentialled to be able to enter the workforce quickly—and that they want to stay in the workforce.” Brogan says productivity is also key and that analysing project-level data, and improving the culture and participation in the industry, are among recommendations to boost productivity. Modular construction and offsite construction were also put forward. As well, there are pilot programs, as part of free-trade agreements, under way recognising the qualifications of workers from countries such as the UK. Waldren says, “People can come in and work on particular different projects in Australia and they can have a fast-track process for recognition of their qualifications in Australia. “Governments just have to have the courage.” Temlett agrees. “Government needs to support the building and construction industry not only by bringing in workers but also by supporting builders to make sure they don’t go bankrupt,” he says. You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

[+] Data Disputes Big Build to Blame for Worker Woes

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