Industrial Reform Has Many Dimensions

Tuesday, September 27th, 2016
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The Australian construction sector has been slow on the uptake when it comes to modernising industrial relations. Will we take an important leap forward?

The Australian Building and Construction Commission (ABCC) was the tool Prime Minister Malcolm Turnbull used to bring on a double dissolution, thereby sending us to the polls on July. Few of us will have yet forgotten the eight week election campaign.

Now Parliament is back in session and the Government returned with a slender majority, attention has returned to the Bill. At a media conference on 31 August, Malcom Turnbull noted that the construction sector employs over a million people. He went on to note that:

“abolition of the Building and Construction Commission is costing Australians billions of dollars in additional costs for the buildings, for the infrastructure, for the roads and hospitals that they need…This is a fundamental economic reform that if it is not enacted, will continue, lawlessness in the industry will continue to impose higher cost on all Australians and reduce Australian’s standard of living.”

Regardless of the politics of industrial relations reform, it is pleasing to see the Government talking up the importance of Australia’s construction industry. It is a welcome recognition of the importance of construction, which is indeed the backbone of the Australian economy.

The importance of construction to modern societies is unquestionable. It contributes significantly to the economy via employment and its contribution to GDP, as well as providing the base for other sectors through facilities and infrastructure. The Australian Bureau of Statistics estimates that from an initial $1 million of extra output in construction, a possible $2.9 million in additional output would be generated in the economy as a whole.

The built environment is also where our population lives and where the majority work. It represents myriad enclosed spaces – homes, offices, industrial facilities, shopping centres, entertainment venues – where the population, on average, spends 97 per cent of its time.

In addition to modernising our industrial relations, ensuring that government clients at all levels are embracing the opportunity to integrate their construction supply chain using digital technologies and more collaborative work practices is a real way forward.

With their ICT business backgrounds Turnbull and new Minister for Urban Infrastructure Paul Fletcher would be well aware of productivity improvements achieved in the banking and finance sector, with various estimates of up to 99 per cent reductions in transaction costs via digital banking technology.

Australia’s infrastructure and building industry has a long way to go to achieve such stellar improvements. We are held back by traditional practices that fracture the economies and other benefits achieved through linking planning, design and construction with operation and maintenance, and with integrating information across government agencies and different levels of government.

Indeed, with a national government, eight state or territory governments and 547 local government authorities across Australia, the opportunities for fallout from the lack of sharing open asset information systems to transform the delivery and management of our community infrastructure are rife.

We currently have too many government entities, too little leadership and insufficient integration of asset information. We need better tools, more collaboration and leadership to deliver value for the buildings, for the infrastructure, for the roads and hospitals that Australians need.

Yes, the efficient operation of the Australian construction industry is pivotal to the well-being and growth of the Australian economy and the enhancement of Australians’ standard of living. Industrial reform has many dimensions.

I look forward to seeing more sensibility and leadership delivered from our governments with some urgency.

One bright point is formation of the National Digital Engineering Working Group, chaired by Simon Vaux, an active champion of digital engineering within industry. This federally sponsored group has senior membership from across Australia and is working to achieve a national approach to digital engineering for publicly-funded transport infrastructure.

But there is much more to be done. We need to engage more with world-class leading research and industry initiatives in North America and Europe so we can deliver a far more efficient construction supply chain to benefit Australia and Australians.

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