The Housing Industry Association is calling on Treasurer Jim Chalmers to task the Productivity Commission to examine how recent industrial relations changes are affecting productivity, workforce participation, skills shortages and housing delivery across the economy.

Treasurer Chalmers has demonstrated confidence in the Productivity Commission by tasking it with examining some of the nation's most difficult and important economic challenges, including housing supply. It is entirely appropriate that the same independent scrutiny be applied to recent industrial relations reforms. 

Recent calls from across the Parliament, including from independent MP Allegra Spender, have highlighted the need for policy settings to be assessed through the lens of productivity, competition and economic performance rather than ideology alone. Ms Spender has argued that productivity considerations should be more explicitly embedded in industrial relations settings and has raised concerns about policies that reduce competition and increase costs. 

The residential building industry is facing persistent labour shortages, increasing costs and declining productivity at a time when governments are relying on the sector to deliver an unprecedented number of new homes.

Recent developments in the construction sector illustrate why an independent assessment of industrial relations reforms is needed.

Questions are being raised about whether new industrial relations mechanisms, including multi-employer bargaining arrangements, expanded employee rights and benefits, increased strict liability offences and penalty provisions, are affecting labour costs, workforce flexibility, competition and the delivery of housing projects. These are significant questions that deserve rigorous, evidence-based examination.

These concerns are amplified by the ongoing fallout from the CFMEU governance crisis and the recent call for a Royal Commission from the new Victorian Premier. The issues exposed over recent years should make both governments and industry cautious about introducing policy settings that may further concentrate industrial and market power within the building and construction industry.

Against that backdrop, HIA is concerned that recently passed Building Cooperative Workplaces legislation could create pathways for governments to preference enterprise agreement-covered businesses in public procurement and funding arrangements. Such measures have the potential to influence competition, market participation and project costs in ways that warrant careful examination.

Small and medium-sized businesses make up the overwhelming majority of residential building contractors. Any policy settings that advantage some businesses over others based on the industrial instrument that covers their workforce should be assessed for their impact on competition, productivity, housing costs and the capacity of the industry to meet the National Housing Accord target.

The Productivity Commission is uniquely placed to assess these issues objectively and transparently.

Australia's productivity performance has been weak for an extended period and construction productivity has been under pressure for decades. At the same time, the industry continues to face acute workforce shortages across many key trades, including electricians, carpenters, plumbers and other essential occupations needed to build homes and deliver national infrastructure.

Housing affordability, productivity and workforce policy are inextricably linked.

If Australia is to meet its housing targets and improve living standards, policymakers need a clear understanding of how workplace relations settings are influencing productivity, investment, business confidence, labour mobility and skills availability.

Industrial relations settings should be evaluated in the same way as planning systems, taxation, migration and skills policies: on the basis of whether they help Australia build more homes, attract more workers, lift productivity and improve living standards.

This is not an argument for or against any particular industrial relations reform.

It is a call for independent analysis and an objective assessment of the other half of the equation – being the productivity impact resulting from the continuous and cumulative suite of IR reforms Australian businesses are facing.

If recent workplace changes are delivering productivity improvements, supporting workforce participation and helping address labour shortages, the evidence should demonstrate that. Equally, if there are unintended consequences that reduce competition, increase costs, constrain workforce flexibility or impede housing delivery, governments need to understand those impacts.

Given the scale of the housing challenge, Australia cannot afford policies that inadvertently drive up costs, restrict workforce flexibility or reduce competition across the construction sector.

The lessons from recent events involving the CFMEU should reinforce the need for policy settings that promote transparency, competition and productivity rather than concentrating industrial influence.

Australians deserve an informed debate grounded in evidence rather than ideology.

Australia cannot afford an ideological debate while confronting housing shortages, skills constraints and weak productivity growth.

That is why Treasurer Chalmers should ask the Productivity Commission to undertake a comprehensive review of the productivity impacts of recent industrial relations reforms, so Australians can have an evidence-based conversation about the trade-offs involved and the policy settings required to support both strong workplace protections and a productive, growing economy.

Statement ends

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