Across both responses, HIA delivered one message: Australia’s workplace laws are severely undermining the industry expected to fix the nation’s housing crisis.

“Homes that should be built are not. Builders are leaving the industry and small business owners who should be hiring aren’t,” said HIA Senior Executive Director of Compliance and Workplace Relations, Stuart Collins.

“If Australia’s 1.2 million homes target is not met, it will be in part due to the country’s workplace laws.

“The residential building sector’s productivity issues are the direct result of a workplace relations system that drives up compliance costs, removes flexibility, and fuels dispute risk - all of which discourage the employment decisions needed to build more homes.

“The surge in Fair Work Commission matters - which President Justice Adam Hatcher has described as ‘unsustainable’ - is further proof of a system creating, rather than resolving disputes,” Mr Collins said.

NES review: 16 years of failure

HIA’s submission to the first comprehensive review of the NES and presents a clear conclusion: the framework has failed.

“Everything HIA warned of when the Fair Work Act commenced has now occurred. More complexity, lower productivity, higher dispute risk, and small builders unable to grow despite record demand for housing,” Mr Collins said.

“Residential building is made up of 97% small businesses, 80% independent contracting, and undertakes project based, weather dependent operations. Yet we remain bound to standards designed for a generic office or factory workforce. It simply does not fit."

Mr Collins also highlighted the extreme compliance burden under the Building and Construction General On-site Award 2020. 

“Calculating pay can involve up to 12 variables per day. Under the new criminal wage theft laws, an inadvertent error can be a criminal offence. No comparable system criminalises complexity mistakes.

Closing Loopholes: opening up harm

HIA’s submission to the Closing Loopholes Review warns that the reforms have failed to meet their objectives and instead created new risks.

“These changes overturn the High Court’s 2022 clarity on contractor status and expose genuine subcontracting to misclassification as labour hire avoidance. That threatens the operational model that delivers two thirds of Australia’s homes,” Mr Collins said.

“The reforms also expand union access and enforcement powers without corresponding accountability, at a time when the industry is trying to deal with the documented unlawful conduct by the CFMEU. 

“Yet civil penalties for builders have increased to $939,000 per breach, with no scaling for business size."

HIA recommendations

HIA has called for practical, targeted reforms, including:

• A presumption of independent contractor status for ABN holding, licensed residential trade contractors.
• A sector-specific employment standards framework (or explicit NES carve-outs) reflecting project-based hours, project-cycle leave, and project-completion redundancy provisions.
• Amendments to the criminal wage theft laws so they apply only to deliberate, repeated underpayments, with safe harbour protections for good faith complexity errors.
• Rebalancing right of entry and sham contracting tests to target genuine misconduct.
• Size scaled civil penalties with meaningful reductions and caps for small businesses.
• A mandatory small business impact test for all future workplace reforms, plus a cumulative review of changes since 2022.

“The most effective corrective action - short of the repeal of the recent reforms - is the establishment of separate legislative treatment and explicit statutory carve-outs for the residential building sector,” concluded Mr Collins.

For more information please contact: