Jobs summit could have major impact on Australian construction industry

The jobs and skills summit, which launched earlier this week, will recommend immediate actions and opportunities for medium and long-term reform. In an ‘issues paper’ (14 pages / 430KB PDF) published ahead of the summit, the federal government said that, while Australia’s unemployment rate is at “historic lows”, a tight labour market has also “brought challenges including widespread and acute skill shortages”.

The paper outlined ministers’ priorities for the summit, which include boosting productivity and wages and increasing migration. Estimates from the Australian Constructors Association (ACA) suggest that the industry faces a critical workforce shortage of more than 100,000 workers over the course of the next 12 months that it said “no volume of migration or training” alone could solve.

David Ulbrick of Pinsent Masons said the infrastructure sector needed to improve financial incentives to encourage workers to return to the industry. “One way to do that is to spend more time planning and less time doing, so that there are fewer expensive inefficiencies like disputes and claims that are a consequence of poor planning. Ultimately, slowing down the infrastructure spend might allow the industry to build some capacity in the Australian workforce, and encourage more efficient project delivery too.”

The summit is also focused on migration and the enduring effect of Covid-19 border closures, as the federal government announced it would raise its cap on permanent migration for the first time in a decade. The country will take up to 195,000 people this financial year, up 35,000 from the previous cap, to help fill workforce shortages.

Adam Perl of Pinsent Masons said: “Allowing skilled and unskilled labour to migrate to Australia is absolutely critical if we are to avoid further escalating labour shortages and spiralling costs. The reality is that we need to let in more people and Covid-19 border closures mean we are now more than two years behind in that process.”

The outcome of the summit could also have important consequences for flexible workers in the construction industry, according to Paul Garth of Pinsent Masons. “The ‘gig economy’ is an area of focus for Australia’s newly elected Labor government, which has made clear that it wants to prevent the erosion of workers’ rights that they see flowing from the casualisation of the workforce,” he said.

He added: “Firms in the construction sector are likely to be impacted by changes to employment regulations that are almost certain to flow from the summit. These reforms could add significantly to their costs, place a limit on the number of consecutive fixed-term contracts they can use, or grant statutory entitlements to contractors.”

Ministers said they would consider the recommendations of the summit and publish an employment ‘white paper’ on the government’s proposed reforms later this year.