Date: 8 August 2024, 10.08am ACST
Speakers: Denita Wawn, CEO Master Builders Australia
Topics: Skilled migration; labour shortages; housing crisis; insolvencies
E&OE
Matthew Pantelis, host FIVEaa: Let’s talk about migration and building houses because the Master Builders Association, Master Builders Australia rather is calling on the federal government to have a dedicated visa pathway for people coming into the industry which needs, get this, half a million more people into the building construction sector over the next few years. If we’re going to build the government’s planned 1.2 million homes and infrastructure that will be needed under the Housing Accord. Half a million more. Where are they going to come from? Denita Wawn, CEO, Master Builders Australia. Denita, good morning. That’s a staggering number of people needed.
Denita Wawn, CEO Master Builders Australia: A very large number, but it’s not an overestimation at all. Other groups, such as BuildSkills Australia, have similar figures that when you look at the pipeline of work that is in demand and the number of people leaving the industry, particularly baby boomers, then we’re in dire need of a lot more people coming into our sector.
Matthew: Where are they going to come from? We’re just going to find people with suitable qualifications overseas and bring them here?
Denita: Well, we believe that the focus obviously needs to be as many Australians as possible in the first instance. Whether it is encouraging people back into the industry, encouraging people to stay a little bit longer if they are nearing retirement, we need to be training a lot more apprentices through trades. We’ve never been good at encouraging women into the sector, and while that is growing, it’s growing at a snail’s place. So, we need to tap into that area, but also migration. We’re very proud of the fact that 25 per cent of the industry are migrants and, as such, is a pipeline of people that we should be tapping into but are not doing so very well at the moment.
Matthew: Alright, so again it points to the government being well behind on the 1.2 million homes, doesn’t it?
Denita: It does. We’re forecasting that they will fall short by about 200,000 homes. That is in part because of workforce, but it is also because of costs and people are concerned about investing into the industry at the moment with costs so high. So, there are multiple factors that are contributing to the lack of supply that means we’re not going to meet that 1.2 in the current climate.
Matthew: Yeah. So, more to be done and to get more Australians involved, you, I mean, you’ve talked of a range of things. I suppose, for kids, if they’re interested, trying to do a VET course through year 11, year 12 would be the way to go.
Denita: That’s the great thing that there are so many options doing it through year 11 and year 12. Certainly, apprentices from 18 and over, after school leavers, are more than welcome. We’re seeing more and more mature age apprentices coming through system where they may have perhaps tried university, not enjoyed it, so now they’re going into a trade. So, lots of people are looking at it. We need more to do it and to complete and certainly that has been a focus of our advocacy to government as is today’s release on migration as well.
Matthew: The crazy part about it is if we do need to bring more people in through migration then the 1.2 million homes is going to fall short for the number of people that are coming into the country. I mean if you’ve got to import even half of those people that you need, then clearly more homes are going to need to be built for them.
Denita: It’s a bit of a chicken and egg situation, isn’t it? Certainly we’re mindful of that and that’s why we’re saying that there should be prioritisation of skills in need in this country and trade qualified is a skill priority that should be very much the top of the pile of visas the government should be considering, and we are calling for a specialist tradie visa. We’re competing with the UK, Canada and New Zealand, who have a specialist tradie visa, and we think we need likewise to introduce a specialist visa for tradies and very much focus their attention and encouraging people to look at Australia as an opportunity for a new life.
Matthew: One thing you can say for sure Denita out of this is that house prices are not going to come down anytime soon. Given the demand, given the fact we’ve got to build them and given also what you’ve been saying, we might need to bring in, well, hundreds of thousands more people. Then demand is going to be as strong as it is today and house prices, as you’d be aware around the country, are only going predominantly up everywhere. Melbourne’s come down a fraction, but everywhere else going up.
Denita: They are going up and of course rents are going up as well. So, our view is that we need to get a range of parameters including economic parameters, right to ensure that we’re maximising private investment, whether it’s home occupiers or investors into the sector. If we don’t get supply right, we’re not going to ensure that the demand is satisfied. And that means that more and more pressure goes on in terms of the housing crisis that we currently face.
Matthew: And those economic factors, gee, it’s so line ball as to how you walk that tight rope wire because if interest rates for instance come down, then demand for housing only increases. If they go up, demand will slow, but possibly to the point of people losing jobs, including tradies and all the rest, and so no one wins out and you know is staying where we are the best possible solution?
Denita: Yeah, you’re spot on in that regard. It is very much an economic tight rope. We’re seeing already that because there is hesitancy of private investment that some tradies are now saying that the have open books for the next, you know, after the next 12 months. The RBA mentioned that the other day. So, there is a really tight rope that we’re trying to navigate at the moment and that’s why it’s important that it’s not just the RBA that needs to do the heavy lifting, but governments need to as well in terms of macro and micro policy. And that means the state governments doing their thing on planning and I know in South Australia there’s been some really good initiatives but equally there are some federal government issues that we’re trying to address at a national level as well.
Matthew: Can I put this to you from Jane who’s texted in? And she says on Insight the other night, it was about housing in Australia. Thousands of people now, with half-finished homes, one bloke, four years of waiting, do many builders or have many builders gone bust now that they’re saying the laws need to be changed? That is, builders should not be able to use someone else’s deposit to work on other homes. Builders do this to help their cash flow, so when they go bust your deposit is well and truly gone. Industry is in a bad shape. There’s no way they can meet the pollies big noting of thousands of homes will be built. So once again, pollies spinning the facts, says Jane.
Denita: Yes, and Jane, I was featured in that programme, so I’m aware of those stories that she’s just identified there. Certainly, we are concerned that there are businesses that have gone under, become insolvent, and put clients and subcontractors in precarious financial situations. Our focus is two-fold. One, ensuring the builder businesses are as stable economically as possible and providing them support. We strongly encourage clients and subcontractors to do due diligence, credit cheques and so forth before they secure a builder. But also, we need to ensure that regulators, whether it’s the tax office, ASIC, right through to the building regulators are doing their job on the ground to ensure that those who are doing the wrong thing are caught. The better system we have of people policing the laws we have, then we have a stronger industry accordingly, and those who are trying to do the right thing are then competing on an even playing field. There’s a lot of great builders out there and it’s a shame that some give them a bad name.
Matthew: Yeah, indeed. It happens everywhere, I suppose, in every possible industry and facet. Thank you for your time this morning, Denita.
Denita: Pleasure.
Matthew: Denita Wawn, Master Builders Association, CEO on the need for more workers. I think we know this because the housing shortage just not keeping up with demand, house prices through the roof.
