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Master Builders has urged the federal government to use the next budget to boost productivity and capacity in the construction sector.
Master Builders has released its pre-budget submission, saying that supply-side reforms were needed to tackle housing inflation.
The industry association, which represents the building and construction sector, raised concerns that an ongoing housing crisis and supply issues meant Australia would fall short of its 1.2 million new homes target by 166,000 homes over the next five years.
Obstacles including labour shortages, high material costs, slow approvals, and rising compliance burdens were flagged as hindering efforts to boost construction.
Master Builders pointed to rents rising 6.2 per cent over the past year as proof that housing inflation needed to be tackled through supply-side reforms.
The building and construction industry, which employs over 1.3 million Australians and comprises 450,000 businesses, faces “serious challenges”, the trade body said.
Master Builders’ September 2024 forecast said that only 1.03 million homes would be built in the five years from 1 July 2024, leaving a shortfall of 166,000 homes compared to the national target.
In response, Master Builders urged the government to expand the National Productivity Fund to include regulatory reform and occupational licensing.
It also urged more support for apprenticeships beyond the current $10,000 incentive, an overhaul of taxation, and more oversight to ensure fair business practices.
A reduction in compliance and regulatory burdens on small businesses was also recommended, as was work to fix bad workplace laws.
Master Builders said the reforms would lift productivity and construction, while ensuring safety and fairness in the construction chain.
Master Builder’s CEO Denita Wawn stressed the industry’s economic importance.
“A strong building industry means a strong economy,” she said.
“For every dollar invested in the building sector, $3 are injected back into the Australian economy.”
Wawn said productivity was key to cutting the cost and time required to build infrastructure including homes, roads, and hospitals.
“Productivity gains are the central driver of improvements in living standards and industry capacity over time,” she said.
Housing supply is a hot topic ahead of looming elections, with the government falling behind construction targets and a raft of recent policies announced by political parties aimed at boosting housing supply and affordability.
The Coalition in February pledged to reform prudential settings, including adjusting serviceability requirements and expanding business lending, if it were to gain power this year.
Last month, the Albanese government also announced a two-year ban on foreign investors buying established homes to improve housing supply.
[Related: New home builds rise, but housing target remains elusive]
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