In anticipation of the 2025-26 federal budget, Master Builders Australia is urging the government to prioritise the building and construction industry to foster economic growth.
The industry, employing more than 1.3 million Australians across approximately 450,000 businesses, has been identified as a pivotal area for boosting productivity and addressing persistent inflation challenges that hinder national progress.
Denita Wawn (pictured above), CEO of Master Builders, highlighted the critical role of the building sector in economic stability.
“A strong building industry means a strong economy,” Wawn said. “For every dollar invested in the building sector, three dollars are injected back into the Australian economy.”
She highlighted the importance of enhancing productivity to reduce the costs and duration of construction projects, which directly influences the quality of life and industry capacity.
Residential construction costs rose by 3.4% over the past year, according to CoreLogic's Cordell Construction Cost Index (CCCI).
The industry’s productivity has significantly declined, with the Productivity Commission noting a stark reduction in housing production efficiency compared to three decades ago.
In response, Wawn advocated for the expansion of the National Productivity Fund and inclusion of regulatory reforms in occupational licensing to revitalise the industry.
Despite a broader economic recovery, the building and construction sector continues to grapple with high inflation rates, which have been exacerbated by a 6.2% increase in rents over the past year.
This inflation is a major source of cost pressure, underscoring the need for a supply-side focus in economic policy to manage housing-related inflation effectively.
Wawn also pointed out the critical role of the construction industry in alleviating the housing crisis by contributing to residential, commercial, and civil sectors.
However, she noted the challenges of meeting the national target of 1.2 million new homes due to labour shortages, high material costs, and regulatory delays, among other issues.
Reflecting these challenges, recent ABS data showed new home starts rose modestly by 4.6% to 43,247 this quarter, still well below the 60,000 needed quarterly to meet the government’s goal of 1.2 million homes in five years.
To address these challenges, Wawn is calling for the budget to extend beyond the newly introduced apprentice incentives.
“Master Builders supports the government’s new apprentice incentives of $10,000 but the budget needs to go further with incentives for employers to offset the significant cost that comes with employing and training an apprentice,” she said.
Master Builders Australia has outlined a comprehensive agenda for the government, focusing on lifting productivity, overhauling workplace laws, strengthening the workforce, supporting business development, and ensuring safety and well-being in the workplace.
The organisation also stressed the importance of a fair tax structure, reducing regulatory burdens, investing in sustainable practices, ensuring fairness in the construction chain, enhancing national defense capabilities, and improving federal governance as key areas for action in the upcoming budget.
