Speaker 1: According to Master Builders Australia, productivity in the industry has
Speaker 1: fallen eighteen percent over the last decade, despite the cost
Speaker 1: of building a home rising by more than forty percent,
Speaker 1: and they want the federal government to unlock that productivity
Speaker 1: now through a whole bunch of suggestions that they're calling
Speaker 1: bold practical reforms that will make a real difference. Well,
Speaker 1: Anita Warn is the CEO of Master Builders and she's
Speaker 1: on the line. Anita, thanks for your time.
Speaker 2: Good afternoon, Bill.
Speaker 1: Bold practical reforms now, that's a lot to ask of
Speaker 1: any government. They tend to be very cautious when it
Speaker 1: comes to reinventing the wheel. What are they Well, I think.
Speaker 2: First and foremost, it's great to hear the Treasurer today
Speaker 2: at the Press Club talk about the fact that he
Speaker 2: wants to see productivity as a cornerstone of their government
Speaker 2: of this term. So that's a good start. We're cognizant
Speaker 2: of the fact that we've got an industry that has
Speaker 2: been burdened by significant increasing in red tape, in time
Speaker 2: waiting for approvals and so forth. That time is money
Speaker 2: in the building game. That means that housing has become
Speaker 2: more expensive. So from our perspective, it's all about governments
Speaker 2: streamlining processes without necessarily adversely impacting quality or safety. We
Speaker 2: want to see progress in terms of enabling infrastructure so
Speaker 2: that gets done more effectively and more efficiently. We want
Speaker 2: to see tax reforms that actually encourages those businesses that
Speaker 2: have good business practice and at the same time regulators
Speaker 2: pulling up those who are doing the wrong things, so
Speaker 2: we then have a level playing fields. So the other
Speaker 2: types of things that we've discussed. We've had a Productivity
Speaker 2: Commission that has said that our productivity is in a
Speaker 2: really bad shape and things have got to change for
Speaker 2: us to be able to build for all Australians.
Speaker 1: Whether it's a personal development. And we've seen a couple
Speaker 1: of stories in the paper recently. They pop up quite
Speaker 1: regularly actually about people who build homes or renovate homes
Speaker 1: and the neighbors are upset and the councils called in
Speaker 1: and all these problems. But there's also the large scale
Speaker 1: projects as well, where whole suburbs object to various things,
Speaker 1: but the excuse is always, well, you know, we want
Speaker 1: to make sure it's done right. But I think what
Speaker 1: you're talking about is yes, of course, but can't we
Speaker 1: speed up the process by which we adjudicate these things?
Speaker 1: What is the hold up? Is it simply people on
Speaker 1: the ground that are able to process this? Is it staff?
Speaker 2: It's staff. It is the laws that make things complex
Speaker 2: rather than streamlined planning approvals where there's a one stop shop,
Speaker 2: for example, for all things to be approved as opposed
Speaker 2: to multiple agencies. You hear stories from our builders that
Speaker 2: they're getting one story from you know, Sydney Water for example,
Speaker 2: but another different story from the the road transport in
Speaker 2: terms of creation of new suburbs that are contrary to
Speaker 2: each other. You've got a planning portal that has all
Speaker 2: sorts of problems in it that we know the new
Speaker 2: Southwest government is trying to fix. We have a lack
Speaker 2: of staff in local council in terms of doing proper
Speaker 2: property inspections, planning and so forth. The list goes on,
Speaker 2: and everyone knows what the problems are, everyone knows what
Speaker 2: the solutions are. What we now need is a concerted
Speaker 2: effort across the country to actually get everyone actually working
Speaker 2: in sync. That's where the problems are. There's no one working.
Speaker 1: In sync right And I assume a lot of these
Speaker 1: things you mentioned Sydney Water for example, are on the
Speaker 1: larger scale projects obviously, and they're the ones where, let's
Speaker 1: be honest, interested in most because they're going to provide
Speaker 1: more housing more quickly.
Speaker 2: That's right, Bill. But interestingly enough, it's not just about
Speaker 2: new urbs. It's also about infield projects as well. We
Speaker 2: know there's a lot of interest in that Mintal ring
Speaker 2: with medium density and high density, but to do that
Speaker 2: you need to ensure that the infrastructure that was there
Speaker 2: for us, say you know, twenty detached homes could actually
Speaker 2: accommodate one hundred units, and so a lot of the
Speaker 2: time there does need to be that critical infrastructure upgrades
Speaker 2: even before the builders can come in and start constructions.
Speaker 2: So there is a lot of components to building and
Speaker 2: building more homes to meet our housing targets. And we
Speaker 2: just need to get this sequencing right because when you've
Speaker 2: got a pace of land that is underutilized or not utilized,
Speaker 2: then that is costing someone money and they in turn
Speaker 2: will then pass it on to the homeowner.
Speaker 1: Now, look, I'm one of many people talking back now
Speaker 1: about small scale projects. We've had plans for a renovation
Speaker 1: sitting on a shelf years now, I've got my own
Speaker 1: reasons for that. But the point I'm making is that
Speaker 1: building is becoming increasingly difficult and costly. And we've got builders,
Speaker 1: on the one hand saying their margins are shrinking. That
Speaker 1: it's in some cases they're taking on projects that are
Speaker 1: not actually making them any money, but they want to
Speaker 1: keep their company and their employees still ticking over until
Speaker 1: they can actually start making a profit on other projects.
Speaker 1: But at the same time, of course, the people who
Speaker 1: are commissioning those projects are finding it increasingly difficult to
Speaker 1: afford them. How can we make those two ends meet?
Speaker 2: Spot on? Bill? And I think I'm like you, I've
Speaker 2: got plans that have been sitting on a shelf for
Speaker 2: quite some time. I think that the issue is really
Speaker 2: a couple of things. Well, first and foremost, we need
Speaker 2: to have an economy where inflation is kept at baying
Speaker 2: interest rates are low. We're starting to see that slowly
Speaker 2: happen where people can naturally afford it. But if you
Speaker 2: think about it, the building of a detached home or
Speaker 2: renovations has increased by over forty percent in the last
Speaker 2: five years, and that's simply unsustainable. And so people are
Speaker 2: just they want to build but they can't afford to build.
Speaker 2: So the thing we've got to look at is do
Speaker 2: we have enough skilled people to do the work. The
Speaker 2: answer is no, so we're focusing on our apprenticeships. But
Speaker 2: we've said to the government more needs to be done
Speaker 2: around skilled migration for trades in building construction. We're competing
Speaker 2: in an international market and we don't provide priority pathways
Speaker 2: for building construction trades. We also know that the builders
Speaker 2: with fixed price contracts quoting you know, sometimes twelve months
Speaker 2: in advance, and I've seen a skyrocketing in prices. So
Speaker 2: there's got to be a greater meeting of minds between clients,
Speaker 2: between and banks and the builders about what is a
Speaker 2: reasonable price. You know, we encourage building does not go
Speaker 2: and sign contracts when you know you're going to operate
Speaker 2: at a loss. People have been burnt and that's how
Speaker 2: we get higher in solvencies. But you're right, they want
Speaker 2: to keep the business sicking, Nobus. It's not just about
Speaker 2: the builder. It's the forty odd trades that they support
Speaker 2: in ongoing building in their.
Speaker 1: Business, and a lot of them are very very small
Speaker 1: operators in some cases sole traders of course, and trying
Speaker 1: to feed a family week to week. Now just quickly
Speaker 1: before you go, Danita, if you don't mind. The federal
Speaker 1: government is now free to crack down on the CFMEU
Speaker 1: after this High Court challenge, a constitutional challenge was dismissed
Speaker 1: this morning. That announcement was made by Chief Justice Stephen Gagler.
Speaker 1: All six grounds of the challenge rejected. How does the
Speaker 1: master builders greet that information? And does it make it
Speaker 1: better for Mark Irving the administrator to get things done?
Speaker 2: Yeah, Bill, I was in the High Court itself this
Speaker 2: morning to hear that decision handed down. It was a relief.
Speaker 2: To be honest, industry has needed certainty. The High Court
Speaker 2: action has meant that there's been a lot of hesitancy
Speaker 2: by people to come forward because they weren't quite sure
Speaker 2: whether to support the administrator or support the executives in exile.
Speaker 2: That puts a stop to that. We can now all
Speaker 2: get focused on cleaning up the union. But I think
Speaker 2: more importantly for us is that we're seeing from the
Speaker 2: evidence that's come out of the work that Mark has
Speaker 2: undertaken as administrator, is there are some bad actors in
Speaker 2: our sector, whether they are unions or people that own
Speaker 2: businesses in the industry. Enough is enough. We've got to
Speaker 2: clean up our actors and industry and ensure that everyone
Speaker 2: is undertaking things lawfully and this gives us the opportunity.
Speaker 2: It's a historic moment today.
Speaker 1: Well said and thank you very much for your time today,
Speaker 1: Adnita Warn pleasure.
Speaker 2: Thank you.
Speaker 1: Anita is the CEO of the Master Builders Australia.