Scaling back infrastructure spending won’t solve the housing crisis

Jonathan Cartledge, Chief Executive Officer, Consult Australia

Scaling back infrastructure spending won’t solve the housing crisis

We need fresh ideas to address housing affordability in Australia but scaling back infrastructure investment is not one of them.
 
Unfortunately, this is one of the recommendations of the NSW Productivity and Equality Commissioners’ Review of Housing Supply Challenges and Policy Options for NSW.

We can all agree on the challenge: 377,000 well-located homes across New South Wales in just five years. 

But Consult Australia does not agree with the view that the construction sector is struggling to deliver homes because governments are “diverting resources” to public infrastructure projects. Nor do we agree with the review’s recommendation to “reprioritise capital spending” to “free up capacity”.

“Perplexing” is how Jon Davies, CEO of the Australian Constructors Association (ACA), summed up this recommendation in a letter to the Australian Financial Review this month. 


Consult Australia has since written to NSW Premier Chris Minns, on behalf of our members, outlining why further reviewing or reprioritising infrastructure projects will not resolve resource or cost issues. 

The recommendations misrepresent the market’s current capacity to deliver, and inaccurately conflate workforce requirements for complex infrastructure with those for residential construction.

It overlooks the fact that new homes will need to be serviced by the very infrastructure projects that are being suggested for delay.

And it risks creating further uncertainty in the immediate infrastructure pipeline, which is already seeing some contraction as major transport projects wind up and energy transition projects stall.

Australia’s governments must create market conditions that allow business leaders to invest in the workforce with confidence. Reprioritising existing capital spend only erodes this confidence.

Instead, we must focus on closing the productivity gap, which Oxford Economics Australia estimates could add $62 billion to the Australian economy each year. 

We also need to fix our nation’s adversarial contracting and procurement environment. Consult Australia has been a long-time champion of standard form contracts. A new partnership with NEC Contracts gives our members access to a globally leading procurement suite and presents government with a practical solution that boosts productivity rather than restricts resources to critical infrastructure. You can read more about our partnership in this month’s Consulting Matters.

Finally, submissions for the Consult Australia Awards for Excellence are now open. Among the 10 categories, the awards will showcase the exceptional outcomes that are possible when industry and government work together. We can’t wait to cheer on the winners.

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Scaling back infrastructure spending won’t solve the housing crisis