Ross Solly:
A couple of different reports out today. Good morning to you Andrew Leigh, how are you?
Andrew Leigh:
Good morning Ross. It’s great to be with you.
Solly:
You know what they say about lies, damn lies and statistics. So, we have 2 reports today. We have the McKell Institute report, which has shown Andrew Leigh, that we are just in the middle of the greatest run of low unemployment since the Whitlam government.
Leigh:
It is a remarkable story Ross. I mean, traditionally, when inflation has spiked in Australia, the way we’ve got it back down is through a recession or a prolonged bout of unemployment. That was the story of the 1970s, 1980s and 1990s and it’s what the British and New Zealanders have suffered in recent years.
The Australian experience has been very different. We’ve maintained essentially full employment, an average unemployment rate of 3.8 per cent over the life of the Albanese government. Here in the ACT, 3.4 per cent, so the story of the labour market of the last 3 years is a remarkable one, and one which is really unique in Australian history.
Solly:
But then we have reports today that building companies in Australia are collapsing at record levels Andrew Leigh. 3,445 building firms have been plunged into insolvency just in the past 12 months. We’ve had a dramatic spike in strike numbers. We know here in the ACT the number of building firms that have collapsed. So that is a remarkable story, but for all the wrong reasons for the Albanese government.
Leigh:
Well, we know that we’ve had a pent‑up series of insolvencies delayed after COVID as a result of some of the rules that were changed around insolvency there. In terms of industrial days lost to disputes, there are fewer industrial days lost to disputes under this government than under the previous government.
We know that there are huge challenges in construction sector productivity. There was an excellent Productivity Commission report on it recently, but it wasn’t about blaming the unions. It went through issues such as approval times, lack of innovation, lack of scale, and some of the issues around skills, which we’re addressing through our half a million free TAFE places.
Solly:
So are you saying Andrew Leigh, that some of these building companies, they would have collapsed ages ago, but only survived because of support that was handed out during COVID? Is that right?
Leigh:
Well, there were changes to the insolvency rules there Ross, which meant that there was a series of insolvencies that followed the reversion of those rules to the way in which they normally were. Every insolvency we take very seriously, and we do our best to assist those companies through, but we do know that there are serious issues in construction.
Construction sector productivity has fallen slightly since 1994, so it has been an ongoing challenge. But that challenge is not, as some of the ideologues would have you believe, to do with unions. Indeed, the residential construction sector is essentially un‑unionised.
Solly:
Is it because of government policy then? Is it because of government policy? If it’s not to do with the unions, is it because of government policy or is it because people who shouldn’t be running building companies are running building companies?
Leigh:
I would urge any of your listeners who are interested in this to check out Productivity Commission report from last month. It’s not a sound bite answer. They talk about the complexity and the slowness of approvals. Approval rules put in place for good purposes that can sometimes have a cumulative effect of delaying and driving up the cost of housing.
They also talk about the challenge of innovation. Only 35 per cent of construction firms are ‘innovation active’ and the average residential building construction firm employs less than 2 people, which is smaller than average. So, some of those challenges are not easily fixed, but what we’re doing with the Housing Australia Future Fund is making an unprecedented investment in Australian housing, working with the states…
Solly:
It’s hard to see… it’s hard to see you meeting your targets is it? For the amount of new houses you want built given the number of firms that are collapsing?
Leigh:
They are ambitious targets Ross, and we make no apologies for that. We’ve made more investment in this than any previous Australian Government. We’re taking homelessness seriously. We’re finally making a Commonwealth investment into social and affordable homes, and we’re working on those workforce issues – getting more apprentices, getting more free TAFE places.
The work we’re doing – that Clare O’Neil is leading, working with states and territories around those regulation approval times – that’s really critical work but it’s not straightforward work. Neighbours have a right to have their say on new developments but we need to build more homes.
Solly:
Dr Andrew Leigh, appreciate your time as always. Thank you.
Leigh:
Thanks so much Ross.
Solly:
The Member for Fenner.