WEBVTT - 'Bad actors' - Master Builders CEO says industry needs to clean its act up

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<v Speaker 1>According to Master Builders Australia, productivity in the industry has

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<v Speaker 1>fallen eighteen percent over the last decade, despite the cost

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<v Speaker 1>of building a home rising by more than forty percent,

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<v Speaker 1>and they want the federal government to unlock that productivity

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<v Speaker 1>now through a whole bunch of suggestions that they're calling

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<v Speaker 1>bold practical reforms that will make a real difference. Well,

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<v Speaker 1>Anita Warn is the CEO of Master Builders and she's

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<v Speaker 1>on the line. Anita, thanks for your time.

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<v Speaker 2>Good afternoon, Bill.

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<v Speaker 1>Bold practical reforms now, that's a lot to ask of

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<v Speaker 1>any government. They tend to be very cautious when it

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<v Speaker 1>comes to reinventing the wheel. What are they Well, I think.

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<v Speaker 2>First and foremost, it's great to hear the Treasurer today

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<v Speaker 2>at the Press Club talk about the fact that he

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<v Speaker 2>wants to see productivity as a cornerstone of their government

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<v Speaker 2>of this term. So that's a good start. We're cognizant

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<v Speaker 2>of the fact that we've got an industry that has

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<v Speaker 2>been burdened by significant increasing in red tape, in time

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<v Speaker 2>waiting for approvals and so forth. That time is money

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<v Speaker 2>in the building game. That means that housing has become

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<v Speaker 2>more expensive. So from our perspective, it's all about governments

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<v Speaker 2>streamlining processes without necessarily adversely impacting quality or safety. We

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<v Speaker 2>want to see progress in terms of enabling infrastructure so

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<v Speaker 2>that gets done more effectively and more efficiently. We want

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<v Speaker 2>to see tax reforms that actually encourages those businesses that

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<v Speaker 2>have good business practice and at the same time regulators

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<v Speaker 2>pulling up those who are doing the wrong things, so

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<v Speaker 2>we then have a level playing fields. So the other

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<v Speaker 2>types of things that we've discussed. We've had a Productivity

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<v Speaker 2>Commission that has said that our productivity is in a

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<v Speaker 2>really bad shape and things have got to change for

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<v Speaker 2>us to be able to build for all Australians.

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<v Speaker 1>Whether it's a personal development. And we've seen a couple

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<v Speaker 1>of stories in the paper recently. They pop up quite

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<v Speaker 1>regularly actually about people who build homes or renovate homes

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<v Speaker 1>and the neighbors are upset and the councils called in

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<v Speaker 1>and all these problems. But there's also the large scale

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<v Speaker 1>projects as well, where whole suburbs object to various things,

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<v Speaker 1>but the excuse is always, well, you know, we want

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<v Speaker 1>to make sure it's done right. But I think what

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<v Speaker 1>you're talking about is yes, of course, but can't we

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<v Speaker 1>speed up the process by which we adjudicate these things?

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<v Speaker 1>What is the hold up? Is it simply people on

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<v Speaker 1>the ground that are able to process this? Is it staff?

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<v Speaker 2>It's staff. It is the laws that make things complex

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<v Speaker 2>rather than streamlined planning approvals where there's a one stop shop,

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<v Speaker 2>for example, for all things to be approved as opposed

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<v Speaker 2>to multiple agencies. You hear stories from our builders that

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<v Speaker 2>they're getting one story from you know, Sydney Water for example,

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<v Speaker 2>but another different story from the the road transport in

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<v Speaker 2>terms of creation of new suburbs that are contrary to

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<v Speaker 2>each other. You've got a planning portal that has all

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<v Speaker 2>sorts of problems in it that we know the new

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<v Speaker 2>Southwest government is trying to fix. We have a lack

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<v Speaker 2>of staff in local council in terms of doing proper

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<v Speaker 2>property inspections, planning and so forth. The list goes on,

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<v Speaker 2>and everyone knows what the problems are, everyone knows what

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<v Speaker 2>the solutions are. What we now need is a concerted

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<v Speaker 2>effort across the country to actually get everyone actually working

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<v Speaker 2>in sync. That's where the problems are. There's no one working.

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<v Speaker 1>In sync right And I assume a lot of these

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<v Speaker 1>things you mentioned Sydney Water for example, are on the

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<v Speaker 1>larger scale projects obviously, and they're the ones where, let's

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<v Speaker 1>be honest, interested in most because they're going to provide

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<v Speaker 1>more housing more quickly.

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<v Speaker 2>That's right, Bill. But interestingly enough, it's not just about

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<v Speaker 2>new urbs. It's also about infield projects as well. We

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<v Speaker 2>know there's a lot of interest in that Mintal ring

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<v Speaker 2>with medium density and high density, but to do that

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<v Speaker 2>you need to ensure that the infrastructure that was there

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<v Speaker 2>for us, say you know, twenty detached homes could actually

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<v Speaker 2>accommodate one hundred units, and so a lot of the

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<v Speaker 2>time there does need to be that critical infrastructure upgrades

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<v Speaker 2>even before the builders can come in and start constructions.

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<v Speaker 2>So there is a lot of components to building and

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<v Speaker 2>building more homes to meet our housing targets. And we

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<v Speaker 2>just need to get this sequencing right because when you've

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<v Speaker 2>got a pace of land that is underutilized or not utilized,

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<v Speaker 2>then that is costing someone money and they in turn

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<v Speaker 2>will then pass it on to the homeowner.

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<v Speaker 1>Now, look, I'm one of many people talking back now

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<v Speaker 1>about small scale projects. We've had plans for a renovation

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<v Speaker 1>sitting on a shelf years now, I've got my own

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<v Speaker 1>reasons for that. But the point I'm making is that

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<v Speaker 1>building is becoming increasingly difficult and costly. And we've got builders,

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<v Speaker 1>on the one hand saying their margins are shrinking. That

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<v Speaker 1>it's in some cases they're taking on projects that are

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<v Speaker 1>not actually making them any money, but they want to

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<v Speaker 1>keep their company and their employees still ticking over until

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<v Speaker 1>they can actually start making a profit on other projects.

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<v Speaker 1>But at the same time, of course, the people who

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<v Speaker 1>are commissioning those projects are finding it increasingly difficult to

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<v Speaker 1>afford them. How can we make those two ends meet?

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<v Speaker 2>Spot on? Bill? And I think I'm like you, I've

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<v Speaker 2>got plans that have been sitting on a shelf for

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<v Speaker 2>quite some time. I think that the issue is really

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<v Speaker 2>a couple of things. Well, first and foremost, we need

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<v Speaker 2>to have an economy where inflation is kept at baying

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<v Speaker 2>interest rates are low. We're starting to see that slowly

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<v Speaker 2>happen where people can naturally afford it. But if you

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<v Speaker 2>think about it, the building of a detached home or

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<v Speaker 2>renovations has increased by over forty percent in the last

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<v Speaker 2>five years, and that's simply unsustainable. And so people are

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<v Speaker 2>just they want to build but they can't afford to build.

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<v Speaker 2>So the thing we've got to look at is do

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<v Speaker 2>we have enough skilled people to do the work. The

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<v Speaker 2>answer is no, so we're focusing on our apprenticeships. But

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<v Speaker 2>we've said to the government more needs to be done

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<v Speaker 2>around skilled migration for trades in building construction. We're competing

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<v Speaker 2>in an international market and we don't provide priority pathways

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<v Speaker 2>for building construction trades. We also know that the builders

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<v Speaker 2>with fixed price contracts quoting you know, sometimes twelve months

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<v Speaker 2>in advance, and I've seen a skyrocketing in prices. So

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<v Speaker 2>there's got to be a greater meeting of minds between clients,

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<v Speaker 2>between and banks and the builders about what is a

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<v Speaker 2>reasonable price. You know, we encourage building does not go

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<v Speaker 2>and sign contracts when you know you're going to operate

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<v Speaker 2>at a loss. People have been burnt and that's how

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<v Speaker 2>we get higher in solvencies. But you're right, they want

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<v Speaker 2>to keep the business sicking, Nobus. It's not just about

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<v Speaker 2>the builder. It's the forty odd trades that they support

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<v Speaker 2>in ongoing building in their.

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<v Speaker 1>Business, and a lot of them are very very small

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<v Speaker 1>operators in some cases sole traders of course, and trying

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<v Speaker 1>to feed a family week to week. Now just quickly

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<v Speaker 1>before you go, Danita, if you don't mind. The federal

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<v Speaker 1>government is now free to crack down on the CFMEU

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<v Speaker 1>after this High Court challenge, a constitutional challenge was dismissed

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<v Speaker 1>this morning. That announcement was made by Chief Justice Stephen Gagler.

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<v Speaker 1>All six grounds of the challenge rejected. How does the

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<v Speaker 1>master builders greet that information? And does it make it

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<v Speaker 1>better for Mark Irving the administrator to get things done?

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<v Speaker 2>Yeah, Bill, I was in the High Court itself this

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<v Speaker 2>morning to hear that decision handed down. It was a relief.

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<v Speaker 2>To be honest, industry has needed certainty. The High Court

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<v Speaker 2>action has meant that there's been a lot of hesitancy

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<v Speaker 2>by people to come forward because they weren't quite sure

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<v Speaker 2>whether to support the administrator or support the executives in exile.

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<v Speaker 2>That puts a stop to that. We can now all

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<v Speaker 2>get focused on cleaning up the union. But I think

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<v Speaker 2>more importantly for us is that we're seeing from the

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<v Speaker 2>evidence that's come out of the work that Mark has

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<v Speaker 2>undertaken as administrator, is there are some bad actors in

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<v Speaker 2>our sector, whether they are unions or people that own

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<v Speaker 2>businesses in the industry. Enough is enough. We've got to

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<v Speaker 2>clean up our actors and industry and ensure that everyone

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<v Speaker 2>is undertaking things lawfully and this gives us the opportunity.

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<v Speaker 2>It's a historic moment today.

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<v Speaker 1>Well said and thank you very much for your time today,

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<v Speaker 1>Adnita Warn pleasure.

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<v Speaker 2>Thank you.

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<v Speaker 1>Anita is the CEO of the Master Builders Australia.