Master Builders Australia is calling for the upcoming 2025-26 Federal Budget to prioritise economic growth by addressing the building and construction industry’s capacity constraints, entrenched inflation, and declining productivity.
The organisation, representing a sector that employs over 1.3 million Australians across approximately 450,000 businesses, argues that current policies are hindering industry progress.
A recent Productivity Commission report has highlighted a significant decline in the industry’s efficiency, revealing that housing construction is now producing only half as many homes per hour worked compared to three decades ago.
This alarming statistic underscores the urgent need for reform in the sector.
Denita Wawn, CEO of Master Builders, emphasised the industry’s economic importance, stating: “A strong building industry means a strong economy.
“For every dollar invested in the building sector, three dollars are injected back into the Australian economy.”
Wawn stressed that productivity improvements are crucial for reducing costs and construction times for homes and essential infrastructure.
The call for action comes against a backdrop of sluggish economic growth, with Australia’s GDP increasing by only 1.5 per cent in 2023-24, marking the weakest annual growth since 1991-92, excluding the COVID-19 pandemic period.
While inflation is easing in the broader economy, the building and construction industry continues to grapple with persistent inflationary pressures.
Master Builders is advocating for an expansion of the National Productivity Fund to encompass additional areas of regulatory reform, including occupational licensing.
The organisation has outlined a comprehensive set of focus areas for the government, including productivity enhancement, increased home construction, workplace law reforms, workforce development, and regulatory burden reduction.
With building costs having surged by 44.1 per cent over the past five years, the industry faces significant challenges in meeting housing targets.
Master Builders’ forecasts suggest a potential shortfall of 166,000 homes against the national target of 1.2 million new homes by 2029.
As the federal government prepares its budget, the building sector’s plea for support and reform highlights the critical role of construction in addressing Australia’s housing crisis and driving economic growth.
The industry’s ability to overcome its productivity challenges will be crucial in shaping the nation’s economic landscape in the years to come.
