On its current course, the construction industry is not sustainable.

Governments and industry understand the problems and even agree on the solutions. The challenge is how to implement them. With a major workforce shortage predicted by mid-2023, a step change in productivity and innovation is needed now.

Infrastructure Australia has produced well-researched and considered plans for reform that align with calls from industry and reports prepared for state governments.

If implemented the plans would address the issues facing our industry and unlock significant productivity gains. In fact, if we could just halve the gap in productivity growth between construction and other major industries, we could save $15 billion every year or construct additional schools, hospitals and roads in each and every state and territory for the same level of investment.

Despite almost universal alignment on the problems and the cure, there is currently no mechanism to ensure that the necessary reforms are implemented and this putting at risk the delivery of the record pipeline of projects and realisation of the substantial productivity opportunity.

As the bank roller of major projects, the Federal Government is well positioned to drive consistent and widespread change across all Australian jurisdictions. The Australian Constructors Association, in collaboration with government and industry, has developed an initiative that provides a way for the Federal Government to do this without the need for significant change to existing frameworks.

The initiative is called ‘FAIR’.

The FAIR initiative is designed to rate government funded projects on how well they performed against a range of key reform areas such as improved productivity and increased innovation. Federally funded projects undertaken by state government delivery agencies would be given a rating that would be published on a website leading them to strive for increasingly better outcomes for their stakeholders.  Just like people who look at restaurant ratings, contractors, wanting the opportunity to demonstrate their capabilities, would look at state government agency ratings when choosing where to focus their best resources, providing another reason for government delivery agencies to collaborate with industry to drive improved outcomes.

Ratings drive results.

FAIR complements and builds on the success of ratings schemes like NABERs, Green Star and the IS Rating. In fact, there is no reason why these existing rating schemes could not be broadened to bring forward a step change in productivity and innovation across the construction industry.

FAIR would be developed in alignment with reform recommendations outlined in the Australian Infrastructure Plan. Central to the initiative’s success would be the establishment of consistent key result areas. Key result areas would likely include productivity improvements, emissions reductions, increased participation of women in the industry, improved worker health and wellbeing, increased sovereign capability, skills development and increased innovation. Performance in these areas would form the basis for an overall project rating.

All federally funded projects would be required to submit a completion report to the body administering FAIR. These reports would provide accountability by demonstrating that projects performed as intended. They would also support the sharing of best practice and lessons learned.

The FAIR initiative could be included in the next iteration of the National Partnership Agreement as a requirement for all federally funded projects. To further incentivise quality outcomes, high ratings could unlock access to new funding pools similar to the previous Asset Recycling Scheme.

If implemented, FAIR would see the Federal Government address the industry’s skills shortage and more while unlocking productivity gains. FAIR is about driving innovation, improving productivity, building capability and capacity and improving the culture of the Australian construction industry so that it is an industry of choice, able to deliver the infrastructure that Australia needs—when it needs it—and for a price that it can afford.

Visit www.constructors.com.au for more information.