Labor told its IR agenda could put housing accord at risk

Labor faces new warnings its contentious workplace reforms will put at risk the PM’s ambitious housing accord.

Master Builders Australia chief executive Denita Wawn. Picture: AAP

Labor faces new warnings its ­contentious industrial relations reforms will put at risk Anthony Albanese’s ambitious housing ­accord, as the Greens clinched a $1bn sweetener to end their Senate blockade of the government’s flagship Housing Australia ­Future Fund.

The HAFF, which will generate returns to fund 30,000 new social and affordable rental homes in its first five years, is now expected to pass the Senate as soon as Wednesday in a key legislative victory for the Prime Minister.

Under the deal negotiated ­between Labor and the Greens, the government will add an extra billion dollars to the National Housing Infrastructure Facility to help provide more homes more quickly for low-income families.

Shelving their demand for a two-year residential rent freeze in order to pass the stalled legislation for the $10bn HAFF, the Greens are now eyeing-off Labor’s Help-to-Buy scheme as a potential vehicle they can use to revive their demands for a rent freeze.

Announcing the agreement with Labor, Greens leader Adam Bandt said that – when combined with the $2bn social housing ­accelerator fund – the minor party had negotiated an extra $3bn that was “available now to be spent this year”.

“Having secured that $3bn, the Greens are prepared to ­support the legislation … Pressure works,” Mr Bandt said.

“Our focus will now shift to ­securing rent caps and a rent freeze. There is legislation still to come during the course of this parliament where the Greens are going to be in the balance of power.”

The Prime Minister told parliament he was “very pleased that the Housing Australia Future Fund now has majority support in the Senate” and that the ­additional $1bn would be invested in the National Housing Infrastructure Facility.

But Labor faces new warnings its industrial relations agenda will undermine its ambitious housing accord, bog down construction with lengthy delays and imperil the nation’s ability to build one million new homes by the end of the decade.

New figures from Master Builders Australia show the government’s initial goal of building an extra one million homes by the end of the decade is within reach – with 1,044,497 new dwellings forecast over the period 2023-24 to 2027-28.

But chief executive Denita Wawn, who welcomed the passage of the HAFF, told The Australian that the updated MBA forecasts did not account for the economic impacts of Labor’s ­second tranche of workplace reforms.

“We think the one million new homes will be met,” Ms Wawn said. “However, there is a caveat on that.

“We believe it will be significantly in jeopardy if the IR laws are passed because of the constraints on productivity.”

While welcoming the government’s efforts to tackle the housing crisis, she said “there is a real risk the radical industrial relations agenda being pursued by Minister (Tony) Burke will negatively impact these efforts.”

“It’s like watching a lone dancer perform a different routine amidst a synchronised troupe – counter-productive and out of place.”

Ms Wawn said the nation was falling well short of meeting the more ambitious national cabinet target of building 1.2 million homes over the five years to 2029, warning this would require the states and territories to implement major changes to remove supply barriers.

The MBA forecasts suggest that, based on its share of the national population, NSW would need to build 376,400 new homes to meet the 1.2 million target but was likely to fall short by nearly 81,000 homes.

Using the same measurement, Victoria would need to build 306,300 new homes but would fall short by 2651 homes; Queensland would need to be build 245,700 new homes but fall short by nearly 10,000 homes, and South Australia would need to build 83,800 new homes but fall short by nearly 30,000 homes.

In August, the Prime Minister said the federal government would ­establish a performance-based $3bn fund to increase the national housing accord target by 200,000 to 1.2 million new homes. However, Treasury has not yet released any state targets needed to achieve the one million and 1.2 million new homes.

The government’s closing loopholes bill – introduced last week – is aimed at cracking down on the exploitation of workers by labour-hire firms, providing minimum standards for gig workers, criminalising wage theft and ­establishing a new definition to ­determine when an employee can be classified as a casual.

Ms Wawn said there were 260,000 independent contractors in the construction sector that would be “significantly impacted by this new definition of employee that may well mean that they are actually forced into an employment relationship which they don’t want to do.”

“There are also new constraints on independent contracting through the unfair contract provisions,” she said.

“We also see that the laws around labour hire may well impact subcontracting. Remember that, in the residential market, up to 40 specialist subcontractors and independent contractors of different trades go into a residential home to complete that home.”

Ms Wawn said these changes would be compounded by the “changes to union rights of entry that could increase disputation and see an increase in terms of days lost and so forth – which we are already seeing without the Australian Building and Construction Commission to oversee ­activity.”

To meet the 1.2 million new homes target, Ms Wawn said the states and territories would need to provide greater capacity for medium to high rise density while reducing delays in planning changes, building approvals and development approvals.

The new MBA forecasts show the volume of residential building work done peaked at $74.9bn during 2021/22, would bottom out at $63.3bn in 2023/24 before bouncing back to $85.9bn in 2027-28.

Despite a volatile 2022-23, the MBA said the total value of construction was $226.5bn with ­activity forecast to peak at $246.2bn in 2026/27.