Current Issues in the Building Industry 1

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Thursday, June 16th, 2016
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The construction world at times is bedevilled by negative talk by those both within and outside of the industry. Some of it is arguably justified, and some of it isn’t.

So who may be right and who may be wrong in their roles and criticisms?

Skilled labour shortages are an issue that at times pervade not only this industry but many others. In the construction context, at its extreme this problem has the potential to cripple the industry. The issue has the real potential to affect project quality, timeliness and efficiency, resulting in cost blow-outs and the potential for disputes to arise. The causes are multifaceted and complex, and much has been written about them. What I will say however is that the search for a solution or solutions is critical and one hopes this search will not be adversely affected by whoever ends up in government on or after July 2.

Workplace productivity is always a ‘current issue.’ Despite the increasingly diminished role unions play in the Australian workforce these days, the trend in working hours is in general on a downward slide for various reasons. If an employee or group of employees work fewer hours, the ‘gap’ may often need to be filled by the employer by, for example, the employment of further staff. This can result in increased costs in wages and associated costs.

Rising costs are always the subject of talk and it is a positive thing that the industry is not currently beset by multiple instances (or many instances at all) of strike activity. Of course, many of the regulatory requirements that businesses in general face can often result in increased costs, and this obviously applies here.

As it should be, safety in the building industry workplace is always being discussed – in particular ways to better protect and enhance safety whilst not sacrificing efficiency. That safety is a current issue is a good thing and is non-controversial. Building industry businesses’ concerns often centre around the often increased costs of compliance in this area, such as insurance premiums and the like. Legally speaking, there is a particularly high set of duties on any employer (and building occupiers among others) to take steps to provide a safe workplace. And in the construction industry there is at least the potential for higher numbers of injuries to occur.

Of course, there is constant talk about corruption and the potential return of the building industry watchdog, which is a large issue and is too detailed to get into here. In addition, the way the economy is tracking at any particular time has a big effect in this industry and this can flow on to the availability of finance, and lead to ‘capital constraints.’ Tax reform, employment law issues and often unwieldy planning approval processes are also key issues.

This is merely a snapshot of the ‘live’ issues currently faced by the construction or building industry. On a positive note, it can be said that we have a healthy building industry in Australia and there are plenty of opportunities and benefits for players within it.

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  1. Charles Litho

    At times in a negative mood I suspect the worst of people and blame the shortage of skilled people as a deliberate act by some people in the industry to benefit themselves. In Melbourne it was only recently made public that a whole generation was not allowed to gain skills in one important area to suit the needs of a powerful group. To overcome the shortage we had to steal skilled workers from some very poor countries that resulted in one place an increase in the death rate, but we saved the lives of Australians.
    We do not need to reinvent the wheel, and, we do not have to restrict any business to get the right results in the long term. We all know that the only workable system is the free enterprise system that allows all citizens access to the economy and its services.
    We only need to look up and see in many places that have not experiences the punishment of war, remain dirt poor and oppressed because their Government work overtime to keep them in that state.
    We have to watch Australia make one step forward and one step back, and, we have to try to find a way to overcome new impediments all over again, and carry on living.
    Some industry looks profitable and the Governments of Australia create more steps in the system to allow more people to get a piece of the cake. The end result the costs of the services double and triple overnight, without providing additional goods and services. In every industry Government involvement and corruption has seen productivity go backwards.
    We are putting more and more money in some fields; either directly out of the citizen’s pocket or from the taxation system and the effect is to lower productivity; because there is no competition.