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National leadership to unlock massive productivity savings from construction
The Australian Constructors Association welcomes the release of Infrastructure Australia’s report on the progress made since the 2016 Australian Infrastructure Plan.
Australian Constructors Association CEO Jon Davies said the report highlights the urgent need for the Federal Government to lead a coordinated reform program.
“The lack of progress in improving sector productivity and implementing market-based reform is a major area of concern,” Mr Davies said.
“Productivity growth over the last 30 years trails that of other significant industries by 25 per cent.
“If we could just halve the gap in productivity growth, we could be constructing an extra $15 billion of infrastructure every year for the same level of expenditure and employ an extra 15,000 people.
“Sporadic progress is not good enough. This is exactly why the Australian Constructors Association has been calling on the Federal Government to take a more active role in influencing the way states buy infrastructure.
“A construction playbook is one example of how national reform could be achieved but there are many other ways government can commit us all to drive positive change.
“Mandating standard forms of contracts, improving risk allocation and embedding a culture standard in the National Partnerships Agreement is another option.
“Regardless of the actual vehicle, the key to successful reform is collaboration. Government needs to work collaboratively with industry to maximise the value of infrastructure,” he said.
“The current path is not sustainable. The construction sector—Australia’s third largest industry employing 10 per cent of the working population—accounted for 20 per cent of all insolvencies last financial year.
“With the record investment in infrastructure we have a real opportunity now to bring about major productivity improvements while creating a more sustainable industry that all of Australia will benefit from.
The 2016 recommendation for the Australian Government to establish infrastructure reform incentives is even more important now with high levels of government debt but no less of a requirement to construct infrastructure.
“We cannot afford to waste another five years with no action—the stakes are too high,” Mr Davies said.
Australian Constructors Association congratulates Infrastructure Australia on releasing these findings and engaging with industry in the development of the 2021 Australian Infrastructure Plan.