Who is Leading the Australian Construction Industry?

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Thursday, September 22nd, 2016
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The Australian construction sector accounts for almost one in every 10 dollars’ worth of output within the Australian economy and more than one in every 10 workers employed.

The industry is responsible for delivering the housing, offices, hospitals, schools, shops, accommodation facilities and public spaces in which people live, work, eat and socialise – not to mention the infrastructure through which they commute and communicate as well as receive clean and reliable sources of water and power.

Moreover, there are a range of stakeholder groups and other actors who influence the sector’s ability to deliver a high quality built environment within an acceptable cost. These stakeholders also drive the sector’s ability to embrace innovation through areas such as improved design, products, working methods and technology. Stakeholders include governments, councils, clients, investors/financiers, planners, designers, builders, regulators, unions, employees, industry associations, suppliers and manufacturers, technology providers and researchers and academics.

With this is mind, it is important to look at fundamental questions about who leads the industry, who sets the agenda and which groups, if any, need to either step up or pull back.

When asked about leadership, Urban Taskforce Australia chief executive officer Chris Johnson talks of a ‘confused circumstance.’ He said the confusion is not the fault of any one party in particular but rather an outgrowth of a situation whereby different organisations and bodies represent different constituencies and have different time frames in terms of their outlook and roles in relation to the building process.

Whilst architects, for example, tend naturally to focus upon the next few years in order to deliver upon some of their immediate projects and to get these projects built, planners might have a horizon of a decade or so. Political leaders, meanwhile, tend to be more influenced by electoral cycles, Johnson says.

As a result, almost nobody is looking at the longer 40-year time horizon over which the shift away from suburban living in detached housing toward urban living in higher density units and apartments is likely to take place.

“I think there are not many organisations or commentators who are really looking forty years down the track, which is really what is required to manage the long term structuring and restructuring and evolution of the urban areas of Australia,” Johnson said.

Johnson says there are a number of stakeholder groups who may or may not be contributing in a proactive manner. One group which he says is leading the charge are developers, whom he acknowledges remain subject to the demands of consumers and the marketplace. Nonetheless, they have been proactive in promoting and delivering upon the diverse mix of housing which is necessary in order to meet the needs of urban populations going forward.

Architects, too, are excited about opportunities for their profession to gain work in the multi-residential sector, although they could be more proactive in terms of moving beyond specific issues of building design and could adopt a broader focus upon urban design.

Engineers, meanwhile, have been proactive in terms of delivering not only upon the engineering aspects of buildings but also the civil infrastructure needed to put in place, Johnson says. He notes, however, that this group is sometimes the target of community angst about change and about aspects of their environment as they know it being ‘ripped up.’

Outside of critical growth areas such as Parramatta, meanwhile, Johnson says many local councils are experiencing considerable degrees of challenge due to large portions of their constituency being made up of residents who grew up under older planning regimes and are potentially resistant to new development and change. Planners are somewhat split, he says, with many of those operating at the strategic end taking a leading role in advocating for change but a significant number who deal with the regulatory and approval end being caught up in some of the localised concerns which this can entail.

A slightly different perspective is offered by Stephen Albin, chief executive officer of the Urban Development Institute of Australia New South Wales. He says the need revolves not so much for more leaders as such but rather for greater collaboration amongst different stakeholder groups in order to help the entire industry to move forward together. Albin says work which is being done through forums such as the Green Building Council of Australia and Australian Construction Industry Forum are examples of the type of activity which needs to occur.

“We’re in this environment whereby everyone wants to see leaders,” he said. “They want to see people come and do their own thing and organise the whole industry.

“I think those days are gone…we’ll be sitting there looking for that leader and that leader will never be able to get legitimacy everywhere because there will be another group that pops up and challenges their legitimacy.

“I think the key thing about this is that every one of the groups need to work together and form alliances and whether you are a union, whether you are the architect’s institute, whether you are the Property Council, UDIA or the government – the only way we are going to progress the industry is by everyone working together, not as one doing their own projects but making sure we are all pretty much on the same page.”

Albin says opportunities for innovation and improved practices are considerable. Community consultation processes, he said, are in need of repair, and he feels technology can play a significant role in this endeavour. Planning processes and the ability to use technologies such as 3D printing on 3D maps are another area where gains can be made, whilst building and engineering technologies coming out of China represent further areas of opportunity. Environmental technologies, as well, will be significant as people will be able to elect in some cases to take their housing ‘off the grid.’

Albin says significant levels of regulation act as a barrier for the sector. Over time, he says, the sector will see a ‘clash’ between government regulation on one hand and innovative design solutions on the other.

On this point, Housing Industry Association chief executive – industry policy and media Graham Wolfe agrees. Wolfe describes the multiple layers of regulation to which the industry is subject as a ‘handbrake’ upon the industry’s ability to pursue new and innovative design and construction solutions and methodologies. These regulations, Wolfe says, range from planning and land use restrictions, what for a long time was a prescriptive approach to the Building Code of Australia, and to specific requirements relating to things like issues of consumer protection contained in domestic building contracts.

Wolfe says many designers and builders were working hard to maximise design choice at affordable prices but were being hamstrung by regulation and red tape in terms of their efforts to deliver upon these opportunities.

Renowned construction industry advisor David Chandler OAM offers a different perspective. He says the construction sector needs massive levels of improvement in terms of productivity, timeframes and cost, construction waste, safety, compliance and energy efficiency. He says many players who have the most to lose from disruption are hanging on to the ‘status quo’ for as long as they are able – a position he says is unsustainable over the long run as the nation’s building sector is increasingly forced to compete with those from overseas who are unsentimental about traditional ways of working.

Chandler says it is too easy to blame governments for the industry’s woes. Whilst governments can help by adopting critical performance measures and making them a condition of enterprise bargaining agreements, reining in unlawful union behaviour, moving to nationally consistent regulation and funding a recalibration of academic and research endeavor in this area to focus upon productivity, real responsibility for improving practices on the ground rested with contractors.

“What can governments do, much less unions and associations?” Chandler said, when asked about who needed to ‘step up’ in the industry. “The enterprises of construction will need to work out if they will play in future or not. Their call.”

Finally, one party which Johnson and Albin say should adopt a more proactive role is the media. Albin says a 24-hour news cycle has made visionary leadership difficult for politicians, and that the media debate has gone from something which was more robust several years ago to being almost solely focused upon house prices. He says the media should focus more upon broader issues such as city design, community engagement strategies and the impacts of matters such as policy relating to banks and financial institutions upon the industry.

Johnson, meanwhile, says the media should adopt a more positive approach toward the evolution of our built environment.

“Certain parts of the media are taking a negative approach toward change because they are supporting those other groups who are part of the previous system of the city rather than for the new system of the city,” Johnson said.

“I think that the media needs to be part of the future, not just representing those who are concerned about change.”

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