Tasmania faces a looming infrastructure crunch as workforce constraints bite deeply

An already stretched workforce is only growing at half the rate it needs to service the state’s infrastructure pipeline, as two separate reports warn of a crunch that is already being felt at a council level.

Master Builders Tasmania CEO Matthew Pollock. Picture: Chris Kidd

Tasmania faces a looming infrastructure crunch as an already stretched construction workforce only grows at half the rate it needs to service the 10-year pipeline.

According to outgoing Master Builders Tasmania chief executive Matthew Pollock, the state’s construction workforce needs to grow to 40,000 by the end of the decade.

“To put that into context that’s the equivalent of the entire population of the Kingborough municipality all working in the building and construction sector,” Mr Pollock said.

“Over the next decade there’s $28 billion of projects in the pipeline. We also need to build 3100 homes a year just to keep pace with population growth.”

The workforce currently sits at about 25,000, having grown from 23,000 in 2021, according to figures provided to the Mercury.

With the workforce only growing by about 1000 per year, Tasmania is on track to be short 9000 building and construction workers by 2030.

Two recent reports found the infrastructure crunch will be more exacerbated outside of Hobart and southern Tasmania.

Last week, Infrastructure Australia’s 2023 Market Capacity Report listed the state’s West and North-West as a national top-ten “hotspot” where “exceptionally high demand... will likely create resource gaps”.

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And earlier this month, a draft report examining the social impacts of a proposed prison at Deloraine found there was a risk of a bottleneck forming in the North and North-West if projects were not staggered.

The report warned that if three major projects were built at the same time – the Northern Correctional Facility, stages three and four of the Launceston General Hospital masterplan, and the new $86.5m court complex in Burnie – labour may need to be sourced from outside the region.

The Launceston General Hospital masterplan. Picture: Department of Health/ Philp Lighton Architects

This would have “impacts on housing supply... [and may have an] indirect cumulative impact on the capacity of the construction industry to meet new housing demand,” the report found.

According to the report, the Department of Justice considers the risk of a squeeze to be “low” due to the co-ordinating role played by Infrastructure Tasmania’s Infrastructure Delivery Committee.

Hobart, Tasmania. Sunday 15th October 2023. Tasmanian Premier Jeremy Rockliff announces new plans for the Macquarie Point Development. Picture: Linda Higginson

Other major infrastructure projects likely to break ground this decade include the $700m Tarraleah hydropower scheme redevelopment (due for a final investment decision in 2024) and the Macquarie Point stadium and precinct, not to mention dozens of private sector proposals.

These include renewable energy projects like ACEN Australia’s Robbins Island Renewable Energy Park and Jim’s Plain wind farm, and lifestyle developments such as the trio of luxury hotels and mixed-use precincts planned for Launceston.

Artistic render of JAC Group's proposed Gorge Hotel at the corner of Brisbane and Margaret St, Launceston. Picture: 6ty Degrees

Workforce constraints, as well as the spiralling cost of building materials and labour, are already retarding development at a local government level.

According to the City of Launceston, council was unable to complete 43 out of 253 (17 per cent) projects from its capital works program for 2022–23 due to resourcing constraints.

The 43 projects are worth a combined $13,247,373.

The Tarraleah hydropower scheme is likely to undergo a $700m redevelopment. Picture: Supplied

Mayor Matthew Garwood said a nationwide increase in demand coupled with supply chain issues was driving “significant escalations in pricing for construction projects and high demand for expert personnel”.

“In cases where project budgets are coming in above expectations, where we’re unable to attract expert staff, or where projects are not time critical, we’re working to refine the scope of projects, reserving our right not to accept certain bids or prioritising other works,” he said.

Hobart and Burnie city councils also confirmed resourcing constraints were affecting their capital works programs.

Hobart was unable to complete the Doone Kennedy Hobart Aquatic Centre warm water pool ($6m), Queenborough Oval sport pavilion upgrade ($1.5m) and Argyle and Campbell street bicycle facilities ($1.395m) last financial year.

Council was forced to defer 58 projects worth a combined $20.5m to this year’s program.

Burnie had 16 projects which were unable to commence last financial year.

The deferred projects represented 16 per cent of its overall 2022–23 capital works budget.