2032 Olympic Games venues risk not being ready unless Qld lifts productivity, removes BPIC

Productivity in Queensland’s construction industry has plummeted while the cost of projects will surge unless there are major reforms, a damning new report reveals.

Venues across Queensland may not be ready in time for 2032. Picture: Archipelago Architects

• Explained: What is BPIC

Queensland’s Olympic Games venues are at risk of not being ready unless the state lifts weak productivity and permanently removes controversial Best Practice Industry Conditions, a major new report reveals.

The Queensland Productivity Commission’s interim report into the construction industry, released overnight, finds productivity has declined by 9 per cent since 2018 – the year BPIC was introduced.

Productivity today is only 5 per cent higher than it was in 1994-95.

What Brisbane’s venue at Victoria Park could look like. Picture: Archipelago Architects

The shortfall jeopardises Queensland’s ability to deliver Olympic venues and meet housing targets, with a projected “supply gap” of 74,000 dwellings by 2029, the report warns.

“If Queensland is to meet the needs of its growing population, match infrastructure commitments and deliver the 2032 Olympic and Paralympic Games, productivity across the industry will need to improve,” it states.

The Commission calls for the permanent removal of BPIC which it says, if still in place in 2029-30, would likely increase project costs by 10-25 per cent and cost the Queensland community up to $20bn.

Treasurer David Janetzki said the government would wait until the final report on October 24 before deciding whether to abolish BPIC.

“I’m not going to make any announcements today as to what is adopted or not adopted, simply because the report isn’t finalised,” he said.

“We’ll let that process take place and let the further stakeholder engagement be undertaken.”

The state government will have three months to respond to the final report.

Treasurer David Janetzki said the government would wait until the final report was handed down in October. Picture: Nigel Hallett

He hosed down concern that weak productivity levels would continue to plague the state and hailed the report as the “first important step” towards improvement.

Mr Janetzki also declared he was not worried about the timeline of building Olympic Games infrastructure.

“There is no silver bullet to productivity growth,” he said.

“We know there are challenges.

“In a world of scarce capital and labour we need to make sure that we are getting every last available element of productivity out of what is available to us because we do have that record capital expenditure.”

The report also says excessive, confusing and inconsistent land use and building regulations imposed by councils is adding to delays and higher costs.

It suggests improving the regulation of building activity.

“There are opportunities to improve regulation under the National Construction Code, financial regulations, and the operation of workplace health and safety regulation, as well as removing regulatory barriers to modern methods of construction,” it said.

Stakeholders have argued that it was difficult to prove BPICs were propping up construction wages due to its connection to union EBA’s.

But the productivity commission has confirmed that BPICs would still cost Queensland up to $18.4bn in lost productivity alone.

The state’s pipeline of works has now more than doubled since December 2020 - only 56 per cent of which has been completed.

Queensland is now facing a $34.3bn works backlog at the same time as it plans to conquer a $117bn capital program under the LNP government before 2028-29.

The report found that unlike previous highs and lows across industry due to impacts such as the mining and LNG booms, the drop from 2018 “cannot be explained”.

Increased production activity would have allowed for the build of more than 70,000 new new dwellings.

“If labour productivity in the construction industry had been maintained at 2018 levels the industry could have produced 9 per cent more output with the same number of workers,” the report said.

The report was unable to find improvements in other construction outcomes, or a decline in safety, to explain the 2018 productivity fall.

Originally published as 2032 Olympic Games venues risk not being ready unless Qld lifts productivity, removes BPIC