Australia will need more than 9 million new homes to meet the needs of the population projected in the recently released Intergenerational report.
The nation will need to more than double its current housing stock over the next 40 years to accommodate the expected 1.3 per cent in annual population growth.
The key challenge will be to tackle intergenerational housing affordability in order to preserve home ownership as a fundamental pillar of Australian economic and family life over the next 40 years.
The report also highlights that more brownfield sites will be essential to meet increased demand for multi-density housing, particularly as baby-boomers seek to increasingly ‘right size’ in response to their changing lifestyles.
This will demand a serious commitment to reforms to counter supply side impediments that drive up house prices. Master Builders supports the importance the Intergenerational Report gives to reducing red and green tape and regulatory duplication at state and local government levels.
State and, particularly local government, will play a crucial role. Master Builders backs the view of the Intergenerational Report that more accountability and less waste and duplication must be required from these levels of government.
Our submissions to the White Paper on Reform of Federation and the Harper Review of Competition Policy have called for reforms that will reward local councils for efficiently releasing more brownfield and greenfield land for housing development, including through national competition style payments from the federal government.
The Report also emphasises an increased investment in infrastructure as an essential underpinning of future productivity and living standards.
The reported growth in population shows that we need greater investment in high quality urban infrastructure, including roads and public transport, to avoid choking our cities and to prevent congestion from negatively impacting on commerce, labour mobility and housing settlement patterns in our cities.
More classrooms, hospital beds and roads connecting work to home will also be needed to provide more liveable and connected communities.
The Intergenerational Report projects a dramatic contraction in the tax base, reinforcing the need for reforms to ensure community infrastructure can be funded and delivered for better value to taxpayers.
There needs to be more work done to examine how the private sector, superannuation funds and government can more effectively partner to deliver vital infrastructure investment.
The Importance of Upskilling
Also outlined within the Report are the challenges of encouraging greater participation in the workforce as Australians live longer and stay healthier.
Innovative approaches will be needed to both skills development and upskilling to ensure the building and construction industry can attract more young people to careers in our industry while dealing with the challenge of an increasing number of aging workers.
The building and construction industry is the largest employer of skilled tradespeople in the Australian economy with approximately two thirds of the workforce employed in skilled roles. In November 2014, there were just over 1,050,000 people employed in the building and construction industry, which represents around nine per cent of total employment.
Over the next decade, the industry will require an additional 300,000 workers to meet forecast demand for construction work valued at $2.8 trillion.
The Intergenerational Report projects that a lower proportion of Australians will be working over the next 40 years, particularly in comparison to those aged over 65. This poses a particular challenge for the building and construction industry where there is predominance of blue collar workers and their physical capacity to continue working beyond the age of 50 to 55 is limited.
To meet the needs of the industry, and both younger and older workers, the government must heavily invest in post-secondary education, particularly skills training.
The current apprenticeship system is in need of a major review to make sure young people can be attracted to work in the trades, employers can be supported to take more apprentices on and the training system can deliver flexible and effective skills for the future.
As the report highlights, increased rates of workforce participation among older workers and those in non-traditional roles, such as women in construction, are also needed.
Assistant Minister for Education Simon Birmingham’s important reforms to advance the future skills agenda are a good start.