Lift housing sector productivity

Housing Minister Clare O’Neil’s plan to tackle the nation’s housing crisis, including working with state governments and local councils to cut red tape holding up construction, is the pragmatic approach the sector needs to boost productivity. The same mindset would benefit other portfolios, too.

Ms O’Neil will focus on encouraging building firms to make greater use of productive innovations such as robotics and more home-building in factories. As she says, other countries are using building techniques that are not widespread in Australia. A robot built in Western Australia, for example, could be “driven on to the side of the street and lay the brickwork for a new home very quickly”. The Productivity Commission report, Housing Construction Productivity: Can We Fix It?, released in February, found the use of prefabricated construction was slow here.

It is not every day that a Labor minister acknowledges that “regulation is a significant issue”, Ms O’Neil said on Friday. But builders will welcome her recognition that, after 40 years of governments adding new restrictions on home building, it has become “too hard to build a house in Australia today”. Extra restrictions were motivated by good public policy but “if you’re a builder, you are confronting a thicket of regulation from every level of government that is giving builders the real impression that we don’t want them to get on with the job”, she said.

In February, the Productivity Commission noted that policymakers needed to better balance the benefits of regulation – neighbourhood amenity, reducing carbon emissions, quality and safety, liveability and environmental protection – against the fall in productivity and affordability. “Policymakers do not get this balance right, and one of the consequences is poor construction productivity,” the commission found.

Ms O’Neil conceded that meeting Labor’s target of 1.2 million new homes by the end of the decade was going to be hard but she intended to persevere. Construction began on more than 43,000 homes in the first three months of the current financial year, but industry groups such as Master Builders Australia say the government will fall short of its 1.2 million target. In January, MBA chief executive Denita Wawn said while the boost in new home builds was welcome, current trajectories indicated the housing target would fall short by about 350,000. In addition to low productivity, Ms Wawn cited labour shortages, costly and restrictive CFMEU pattern agreements, and lack of supporting infrastructure as part of the problem.