Everybody knows that a home is built by the subbies, around 25-30 different specialist trade contractors will be onsite during the building or renovating of a home, from carpenters to electricians, painters, plumbers, tilers and bricklayers and the list goes on. 

These trades, all small businesses, come together, directed and co-ordinated by the builder, at different times to move the building of a home through its construction phases. This process, which appears seamless to an outsider, is actually a complex web of business to business relationships underpinned by trust and the certainty that this is always just how it has been done.

For the residential building industry this way of operating provides a flexible, workable and efficient model for engaging workers and managing the peaks and troughs of the home building cycle. 

Builders rely on access to good and reliable trade contractors to maintain competitiveness and the cost-effective benefits that flow on to the consumer.

For contractors it is a pathway to business ownership, career flexibility and entrepreneurship. They choose to work under these arrangements because they want to run their own businesses, make money and be rewarded for their productivity, efficiencies, and entrepreneurial efforts. Contractors wish to pick and choose the work they do. They do not want to be treated as employees as it would effectively limit their income.

But governments have progressively challenged the status of independent contractors with laws that variously deem them to be employees, for payroll tax, workers compensation, WHS and industrial relations purposes. 

Specifically, HIA is concerned that the Government’s current reform agenda, that would see the Fair Work Commission empowered to set minimum standards for ‘employee like’ workers and be given the power to deal with small business to business contracts will undesirably challenge the status quo, having far reaching consequences.

The impact of these reforms will not just be felt by the thousands of small business trade contractors whose livelihood depends on operating as an independent contractor or for the hundreds of builders across the country, already managing a range of economic challenges who rely on an efficient cohort of trade contractors, but this form of government interference will simply add cost, putting the purchase of a new home further out of reach for many. 

The dream of homeownership is still very much alive with research commissioned by HIA in 2022 highlighting that 75 percent of Australians feel that they should be able to own their own home, and that 85 percent of renters aspire to own their own home but only 42 percent feel they will achieve it. 

There is also broad agreement that we must increase the supply of new homes to make housing more affordable, in fact the latest report from the Government’s peak advisory body (NHFIC) highlights that the under supply of housing is set to worsen as demand continues to outpace supply.

To arrest this, the Government has committed to delivering one million homes over the next 5 years. There is also a legislative package of housing supply measures stuck in Parliament. But who will build these million homes? What is the unspoken, but critical component of the ‘housing supply solution’?

It’s the tradies. The thousands of legitimate independent contractors who physically build these homes.
The recognised need for an adequate supply of new homes demands that the task of governments should be to preserve and enhance genuine independent contracting businesses, not force small business to become employees. 

Moves to restrict the use of independent contracting in the residential building industry will only serve to undermine the contribution of the sector to overall economic growth and exacerbate the challenge of making housing more affordable.

We are hopeful that the Governments reform will hit its bullseye and only capture those said to be the intended targets, but rarely is government action or legislative change so neatly confined.

Fighting to preserve the status of independent contracting in the residential building industry has always, and will always be, a priority for HIA.