Sharp ramp up in skills needed to meet ambitious housing target

As the building and construction industry regains its feet after a turbulent few years, it is timely that Minister for Skills and Training Brendan O’Connor has announced a review of the apprenticeship system.

Industry bodies have been calling for a review for some time as skilling up a new workforce will be critical if the government wants to get anywhere near its hefty target of building 1.2 million homes over the next five years.

HIA executive director of future workforce and industry research Geordan Murray said this review provided the government with an opportunity to transparently evaluate the successes and failures of previous schemes and to optimise the apprenticeship incentive system for the modern economy.

“The government’s ambitious goal to build 1.2 million homes over the next five years implies a substantial increase in demand for skilled trades workers, and the pathway to a career in a trade is via an apprenticeship.

“The housing industry needs more skilled trades workers, and the industry needs a well-functioning apprenticeship system.

“The benefits of apprenticeships are clear, those who complete apprenticeship based qualifications show higher rates of employment than nearly every other type of formal qualification.

“Despite this, there are too few people wanting to begin apprenticeships in construction trades, those who do, too few are sticking with their training through to completion.”

The HIA is also concerned there are too few employers willing to take on apprentices and provide the practical workplace based training.

They also highlight that the delivery of the formal training component of apprenticeships must also be improved and that the inability to access the formal training in a way that meets the needs of students and employers is a significant impediment to progression of apprentices.

“This issue is particularly important to apprentices and employers in regional areas where attending classes may require travelling vast distances including overnight stays,” Mr Murray said.

“There have been a myriad of schemes and programs over the years aiming to support apprentices through their training, as well as incentivise businesses to create employment opportunities for apprentices, none have enjoyed enduring success.”

The industry needs to be prepared as Australia is set to commence construction on a million new homes, with HIA forecasting demonstrating that they will be almost 200,000 short of the Australian government’s target.

HIA senioreEconomist Tom Devitt said the HIA’s recently released Economic and Industry Outlook Report shows that it could be possible to build 1.2 million new homes over five years, but it will require significant policy reforms.

“These reforms need to include lowering taxes on home building, easing pressures on construction costs, and decreasing land costs.

“Punitive tax surcharges on foreign investors are squeezing out precisely the investment needed to help meet government housing targets.

“At the same time, recent changes to building codes are likely to add tens of thousands of dollars to the cost of building new homes.

“More support for apprenticeships, including maintaining current apprenticeship subsidies, will go a long way in this direction.”

HIA data shows that an annual total of 96,250 detached house commencements is expected for 2023-24, down by 12.6 per cent on the previous year and down by almost a third on the 2020-21 peak.