New Leader an Opportunity to Revisit the Construction Industry 8

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Wednesday, September 16th, 2015
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Congratulations to Malcolm Turnbull and his new team.

It is fantastic to hear that the new PM talks about a new vision. These are reassuring sentiments, for with the demise of the commodity sector and the rust belt that was once the Victoria manufacturing industry, a new vision needs to illustrate what the “new economy” will be.

But for the heavy lifting being done by the building industry, Australia would be in recession. Unlike the early 90s, there is no spare tire, such is the decline of the manufacturing sector. If the building industry goes belly up, the recession could be more painful than that of 25 years ago, so it is vitally important that the building industry “keeps on trucking.” There is no time to rest on laurels; the continuation of a robust building industry will require “thinking outside the circle” as well as innovation and preparedness to see things through a different set of lenses. Above all, government needs to engage, so here are some ideas for consideration:

A Ministry for Construction

The Australian building industry is a huge contributor to the Australian GDP, accounting for 7.8 per cent of GDP. Put another way, it ranks number three in terms of industry sector contribution to GDP. Australian governments can ill afford to be disconnected from this vital sector and may well look to the model of Singapore, where government performs a pivotal role in the built environment space.

It follows that there would be mileage  in establishing a dedicated Ministry for Construction. The Ministry would be empowered with a passion to identify and support better ways to develop world’s best practice construction technology and world’s best practice design. The Ministry would also through cooperative federalism develop a more harmonised approach to planning and building control and key as built objectives. It would back and strengthen the role of the Australian Building Code board.

The Ministry should be willing to develop a vision for the future with respect to shaping Australia as a world leader with regard to construct and design innovation.

An Australian Silicon Valley

The Honourbale Malcolm Turnbull loves the IT and communication space, so maybe its time for Australia to “turbo charge” the IT sector with a new vision, top down. The establishment of an IT regional hub, an Australian Silicon Valley as it were, would be a giant step forward. With the disappearing car industry, Geelong needs a new regional economy and the establishment of an IT hub is just the ticket. A best practice smart building “green-high tech hood” would have plenty going for it. The Feds could get in behind it with infrastructure funding and tax concessions for research and development for those who wish to participate.

Of course this would still stimulate regional building activity, jobs and an eye to the future economy rather the rear view mirror.

VFT – Very Fast Trains

One of the best infrastructure investments could be the construction of VFTs between cities and regional hubs. Melbourne to Geelong is a classic opportunity. A VFT would effectively make Geelong an outer Melbourne suburb, which would boost the regional economy of Geelong and its hinterland and take pressure off stressed arterial roads and infrastructure resources of Melbourne.

Equally, there would be merit in building a VFT line between Sydney and Canberra. A Sydney to Canberra VFT would increase people and goods and services traffic between the two cities, and there is little doubt that there would be an ACT population growth dividend. Canberra would also become less isolated, less Canberra-centric  and better connected to the pulse of major metropolis.

More Iconic Buildings – Take a Leaf out of Singapore’s Book

Singapore bears testimony to the adage “if you build it they will come,” and by God are they building. Singapore showcases some of the most extraordinary examples  of modern day architecture. Ask yourself, “is Australia showcasing as of late that which can be construed as modern day architectural statements of international iconic persuasion?”

The current design debate is about height controls, winds and amenity impacts. These are laudable and necessary discussions, but there is no debate on how we get the “wow” factor. Where are the new Sydney Opera Houses? Whilst the emerging tigers pride themselves on building extraordinary modern day architectural titans, Australia keeps its finger frozen on the pause button. What, you may ask, has this go to do with the new economy? Well, architectural monuments attract tourists and they create a buzz. Paris, like Melbourne, is flat with a dirty brown river running through its centre, but it is the architecture and its exquisite as-built beauty that defines the city and makes it one of the greatest tourist hubs in the world. The federal government may well consider having an interest in leading a new conversation about how Australia can embrace architectural “wow” factor.

Affordable Housing

Over 80 per cent of Singaporeans live in 99-year lease apartments built by a government concern called the Housing and Development Board (HDB). It’s an extraordinary achievement when you think about it. The UN Scroll of Honour benchmarked Singapore as “providing one of Asia’s  and the world’s greenest, cleanest and most socially conscious housing programs.” The HDB also sells apartments well below market rate to first home buyers and provides housing loans to those whom fulfil the eligibility requirements, so it is a financier, builder and developer.

Some have argued the Singapore model cannot be emulated here, though I don’t see why. Lee Kuan Yew said that by the time he finished office, no Singaporean would have mud on his feet.  Singapore, devoid of Australia’s abundance of natural agricultural and mineral resources, has undergone an astonishing built environment transformation in a few decades. The leadership comprised visionaries who refused to fence themselves in by thinking that the way we have done things in the past will be the road map for the future. They also were of the view that part of the social contract was home and amenity.

There is nothing to prevent the Federal government from exploring offshore models like those of Singapore. Nor is there anything to suggest that the federal government can’t through the medium of cooperative federalism venture into the affordable housing area both as developer and funder. It would be compatible with boosting an infrastructure agenda and were the Crown to adopt a leasehold method of ownership, with ownership ultimately reverting back to the Crown the government is future proofing. Predictably, the naysayers will say this can’t work here, to which I will say thank God for the citizens of Singapore the founding fathers of the new economy weren’t of like mind.

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8
  1. Gloria

    Old wine, new bottle – he's still beholden to the party consensus as a freshly appointed leader.

  2. Andrew Heaton

    These are worthy ideas to start a conversation we have to have.

    Without any disrespect to his predecessor, Turnbull is smarter and more articulate and will hopefully be able to take the national dialogue beyond throwaway slogans and toward strategies to encourage encourage investment, innovation and entrepreneurship as well as tackling crucial economic and social challenges.

    Provided he can unite his party and deliver stable government, this can only be a good thing and his victory should be welcomed.

  3. Noelle

    Fantastic article. Where's the money. If Abbott didn't have it , where is it coming from now. We only have a new Leader not money!!!

  4. Emily Martins

    Congratulations to Mr. Turnbull as the new Prime Minister of Australia!
    As a Geelong girl, I can say that Kim is on point when he discusses the issue of a VFT train from Geelong to Melbourne and the boost it would have for the regional economy.

  5. Paul Cott

    A very timely article in light of very recent events in the public sphere.

  6. S Heys

    Kim,

    Singapore has been built on the back of cheap foreign labour, go and stand at Little India on pay day and watch the hundreds withdraw their pay, they live in cramped quarters, they have huge OWS issues, they have to wait for months for some, if any Workers Comp pay.
    Yes it would be great for Australia to have an MRT and iconic buildings like Marina Bay sands, but you never hear of the workers that have died building these. So what is your solution to the wages issue Kim?

    Regards,

    Yours in good buildings and building practise.

  7. Robert Whittaker

    A well considered article.

    That this was published before the Cabinet re-shuffle which resulted in Jamie Briggs was appointed Minister for Cities and the BUILT ENVIRONMENT, an entirely new posting lends weight to the argument of that the Government does have a new vision at least as far as the building industry is concerned.

    Lets not forget that whilst the building and construction industry represents some 8% of the nation's GDP, its spin-off effect into the productivity of other sectors amplifies its impact upon the GDP considerably.

    This reality was reflected in Turnbull's announcement of his Cabinet yesterday when he spoke, surprisingly at length as compared to other postings, of the economic power houses that are our nation's cities.

    So let give credit where it is due – we simply haven't had a Minister for the Built Environment before, and this oversight has at last been corrected.

    So based on the evidence to date – I must agree with Kim Lovegrove's well considered piece, the new Prime Minister IS offering a new vision for our country and specifically to OUR sector – something which had not been considered by either side of the political fence before now.

  8. Brett Bates

    Unfortunately there is a presumption that we have a 'robust' building construction sector. Our well respected public training provider – the technical colleges of the past bannered by the TAFE (technical and further education) logo – that have provided the bulk of high quality, independent formal training for trades and supervisory building vocations are being destroyed by private training providers in a rush to exploit the poorly administered and audited VET system. Federal minister Birmingham and Victorian Premier Andrews announced moves to reign in excesses where private RTO's can offer Cert IV and Diploma qualifications in building with a mere 20 day training period . Despite evidence from the other states , NSW is sleepwalking into exactly the same disaster. No wonder that a UNSW survey of recently completed apartment buildings reported that despite being granted an occupancy certificate, over 75% of the buildings had significant construction defects. Formal training and assessment – from TAFE to university level – when the qualification is linked to building licencing and accreditation must be immune from market manipulations if a robust construction industry is desired.