Tulipwood Economics report finds Labor’s BPIC deal inflates costs on mega projects by $1bn each year

A new report has found Labor government’s BPIC sweetheart deal with the CFMEU has inflated costs on mega projects by $1bn each year and squeezed homeowners out of the market.

Under the sweetener, union members in construction sector receive wages 50 per cent higher than non-union members.

New homebuyers are being squeezed out of the market as the Labor government’s BPIC sweetheart deal with the CFMEU inflates costs on mega projects by $1bn each year.

A report by Tulipwood Economics, commissioned by the LNP-aligned Australian Institute for Progress, found productivity in the building industry has plunged 18.1 per cent from a peak one decade ago and construction costs in Queensland have blown out 30 per cent since 2019.

“Queensland’s construction industry is broken,’’ Australian Institute for Progress executive director Graham Young said.

“The Queensland taxpayer is getting less and paying more which raises serious questions about the cost of the government’s infrastructure program, projected total debt, and future inflation in the whole construction industry.”

Graham Young, executive director of the Australian Institute of Progress.

The report estimated the cost of companies adhering to the mandatory Best Practice Industry

Conditions procurement requirements, along with other “structural inefficiencies of the Queensland construction sector” to be at least $4.2bn over four years.

Should BPIC be abandoned, economic gains could reach $8.9bm over four years.

Under BPIC, union members in the construction sector receive wages 50 per cent higher than non-union members with civil labourers, crane operators and traffic controllers on Queensland Government mega projects receiving between $150,000 and $200,000.

Construction cost inflation in Brisbane is the highest in Australia and New Zealand at 6.5 per cent.

Tulipwood Economics noted 26 rostered days off each year on top of public holidays, compared with 6 to 10 days on civil sites, a 5 per cent wage rise every year until 2027 and tools down agreements for inclement weather “sapped worker flexibility and increased project risks”.

The LNP has promised to reintroduce a productivity commission if it is elected on Saturday, but won’t say whether BPIC agreements would be abolished.

Labor has argued the state government must be a model employer with high wages and conditions.

Originally published as Tulipwood Economics report finds Labor’s BPIC deal inflates costs on mega projects by $1bn each year