MBA Acting CEO forecasts a difficult 2023 for builders. Image: Canva
  • ABS confirms impact on the building and construction sector viability
  • MBA Acting CEO Shaun Schmitke says 2023 is going to be difficult for builders
  • Schmitke is critical of the Government's 'employee-like' policy

Data from the Australian Bureau of Statistics (ABS) has revealed the impact of fixed-price contracts, high inflation, supply chain disruptions and labour market shortages on the viability of the building and construction sector.

Master Builders Australia Acting CEO Shaun Schmitke says the governments must lift the handbrake on the building and construction industry by lowering the cost of doing business.

“We have forecast the 2022-23 financial year will be particularly difficult for builders who have found themselves in the profitless boom off the back of unprecedented cost pressures due to the combination of fixed price contracts, materials, workforce and interest rate cost pressures as we rebuild from Covid,” Schmitke said.

He added there needs to be a further look into fixed-price contracts and appropriate risk-sharing between banks, developers and builders.

“Governments need to look at what impact their regulations and policies have on the cost of building homes and on the cost of building social infrastructure; that includes industrial relations laws, the cost of planning and the need for more titled land.”

As a result of higher hourly labour costs and the expansion in activity across the industry during 2021-22, the industry’s total wage bill rose by 9.8%.

Schmitke says the building and construction sector has consistently had wage growth exceed other industries, pay above award rates and has high levels of full-time employment.

“You have to ask, then, why is the Government proposing complex industrial relations legislation that will take away the rights of independent contractors and self-employed tradies.”

The upcoming tranche of industrial relations legislation must be considered with reference to the current national economic conditions, Schmitke added.

He pointed to the Government’s ’employee-like’ policy as a point of contention.

“The proposed employee-like policy goes beyond the Government’s purported original scope of supporting gig workers and leaves the door open to swallow industries across the economy,” he said.

“This includes well-established forms of work, including independent contractors and self-employed tradies.”

Schmitke says if the Government intends to limit this proposal to gig workers only, then it should be made explicit and give the undertaking to exclude industries outside the gig economy before the legislation is introduced.

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