- Queensland Productivity Commission's Construction Inquiry Interim Report reveals significant productivity decline in sector under Labor.
- Construction productivity is down 9 per cent since 2018, leading to 77,000 fewer homes being built.
- BPICs to inflict up to $20.6 billion hit to the community by 2029-30 and increase project costs up to 25 per cent.
The Crisafulli Government is delivering on its commitment to rebuild productivity on Queensland construction sites after the independent Productivity Commission confirmed significant problems within the sector.
The Queensland Productivity Commission's (QPC) Interim Report has identified a marked decline in productivity, leading to fewer homes being built, higher rents and significant delays and cost blowouts on major projects.
The bombshell findings include:
Labour productivity in the construction sector today is only 5 per cent higher than it was in 1994-95, compared to growth in the market economy of 65 per cent over the same period.
Construction productivity in the State has dropped by around 9 per cent since 2018, resulting in the construction of 77,000 fewer homes in that time. It means the industry today needs 9 per cent more labour than it did in 2018 to produce the same level of output.
Labor's Best Practice Industry Conditions (BPICs) were adding to the cost of major projects and holding back the construction of thousands of new homes.
If BPICs remained in place until 2029-30, the resulting impact would be a net cost to the community of up to $20.6 billion, with project costs increasing by up to 25 per cent, up to 26,500 fewer homes built and rents 8.3 per higher.
The interim report, based on stakeholder meetings and submissions, said restrictive and complex regulation, as well as sub-optimal procurement practices had made construction more difficult and expensive.
Data provided to the inquiry suggests no material improvements to safety outcomes have occurred since BPICs were introduced.
Concerningly, the QPC said some stakeholders were reluctant to provide submissions to the inquiry, stating a fear of reprisals.
The final report will be provided to the Government in October following further consultation and stakeholder submissions.
Deputy Premier and Minister for Industrial Relations Jarrod Bleijie said restoring productivity in our construction industry was critical to ensure infrastructure projects can be delivered on time and on budget.
"We already knew that productivity on Queensland job sites fell through the fall under the former Labor Government, enabled through their mates in the militant CFMEU," Deputy Premier Bleijie said.
"Last year we also took immediate action by suspending BPIC – the CFMEU tax, which caused worksites to be shut down for nearly a third of the year.
"We want Queensland construction workers to have safe working conditions and be paid competitively, but safe worksites can also be productive as well.
"The Crisafulli Government re-established the QPC as part of an election commitment to boost productivity and deliver generational infrastructure, including ahead of the 2032 Olympic and Paralympic Games."
Treasurer David Janetzki said the interim report validated the Crisafulli Government's decision to pause the use of BPICs on new Government funded construction projects.
"This initial modelling confirms the concerns raised by the industry about poor productivity within the construction sector," Treasurer Janetzki said.
"These early signs justify the Crisafulli Government's re-establishment of the QPC and its initial Construction Inquiry which is examining conditions in the construction sector and identifying ways to improve the industry and boost productivity.
"I encourage all stakeholders to provide feedback to the inquiry, and we will wait for the final report to be released to the Government before we act on any recommendations."
Housing Minister Sam O'Connor said the interim report backed in the work the Crisafulli Government had been undertaking to reform procurement policies and building industry regulations.
"Our action to indefinitely pause BPICs, bring the Queensland Building and Construction Commission into the 21st century, and cut red tape to make it easier to do business with government were the first steps to deliver the homes and infrastructure our state needs," Minister O'Connor said.
"Queensland needs to be the building capital of the nation, and we look forward to receiving the final report later this year and will consider those findings."
