COAG to investigate construction industry
COAG has agreed to establish an independent review panel to conduct a broad ranging investigation into cost, competitiveness and productivity challenges in the commercial, civil and large scale residential construction industry.
A three-member panel with legal, industry, workplace relations and economic expertise will be appointed to conduct the review over the next 12 months.
A secretariat within the Department of the Prime Minister and Cabinet, comprising Commonwealth and State representatives, will support and report directly to the review panel.
Under its terms of reference, the Review will undertake analysis and develop findings on:
- Market structure: The level of concentration in the various sectors of the construction industry; how this has changed over time; the drivers of these trends and what effect has this had on construction costs; and the openness of the market to domestic and foreign suppliers of goods and services, including barriers to market entry. The relationship between public sector demand for construction (in terms of level and timing) and costs.
- Regulations and compliance: Assessing and identifying opportunities to reduce the costs of compliance in the construction sector while maintaining quality and safety standards; patchwork regulatory arrangements across jurisdictions and associated risk mitigation costs; impacts of building energy efficiency standards.
- Taxation and other charges: The impact of taxes, duties and developer charges on overall construction costs, and the appropriateness and efficiency of these taxes and charges.
- Labour costs, skills and workplace relations: The availability of suitably skilled labour in the construction sector, including: options for improving skills development; labour mobility including trades licensing and mutual recognition; attracting and retaining skilled workers in the industry; the current and future role of Australia’s migration program. The role played by industrial relations, noting the current and recent reviews of workplace relations legislation. The role that innovative management, new technology, project management and business practices could play in improving efficiency in the delivery of projects.
- Other arrangements: Examining issues and costs associated with the allocation of risk, regional market structure and labour force differences, availability of finance, contracting arrangements and delivery models for construction projects. Examining the factors impacting on new technology uptake. Examining the rate of insolvency in the sector.
The panel will undertake analysis and consider reforms that could be pursued nationally or by individual Commonwealth, State, Territory and Local governments.