Keynote - Master Builders Australia National Leaders' Summit

10 Sep 2019
Canberra, ACT
Prime Minister

PRIME MINISTER: Well, thank you very much, Denita. It's great to be here with you and I want to thank you for your leadership when it comes to the thing that matters and creating jobs in this country. I want to talk a bit more about that but can I start off by acknowledging the Ngunawal People and their elders past, present and emerging. Can I also acknowledge any members of our Australian Defence Force or any veterans who are with us here today and simply say thank you for your service. Can I thank the building industry too for the great job they do in employing veterans in this country. You are a key part of the initiatives that we have to ensure that we're getting our veterans into work and you understand their skills, you understand what they have to offer which is just simply outstanding. I want to thank all those in the building construction industry who are giving our veterans a go. I know they are transforming your businesses and doing wonderful things. So thank you very much.

To Denita, to Hedley Davis the President of the Master Builders, and to all of the building and construction leaders who here today. You’re about jobs and that's what I'm about. We do the things that create jobs. I want to thank you for the jobs you do create and that you will create, more importantly, in the future. I want to acknowledge that one of the reasons I'm standing here is because of your contribution to this important national task. And I want to thank you also because the Master Builders is not a shy organisation. It's an organisation that speaks its mind. It's an organisation that speaks clearly and it stands up for the things that they believe in. You have done that when it comes to issues of negative gearing that the Labor Party sought to change at the last election. You've done that, particularly to highlight the terrible impact that could have had on our residential housing markets and the residential building industry. How it would undercut home values, how it would push up rents and it would hit 1.3 million mum and dad investors. The MBA wasn't shy about those things. It wasn't about politics or partisanship or anything of that sort. It was going to have a serious impact on the residential building industry in this country and so you spoke out and you stood up and I know a lot of the flak you copped from it as individual builders in your communities and you got a fair bit of lip, I would have thought, around the place because of the fact that you actually stood up for what you thought would be good policy. I want to thank you for showing that strength. I think it is a real positive thing that there was one organisation in an industry body that was prepared to call these things out and I appreciate that very much.

But that wasn't the only thing. You stood up when it came to Labor's policy to ban and abolish the Australian Building and Construction Commission. Why? Because you know what it would do to your industry. You know what it would do to jobs. You know what it would do to investment. You know what it would do to people who want to work in the industry. It was in your industry's interests to ensure that there is the rule of law on building sites in this country. So you spoke up for it, as I expect you to, and equally, where there are issues that our Government is engaged in, I'm sure if you have different views to us on this you will similarly speak up and as you should. I don’t have any problem with that because I know when the MBA is raising issues, they're raising it from the perspective of their members and that's as it should be on every occasion. 

Since the election, we’ve gone further with introduced legislation to give courts more power to deregister law-breaking unions and officials because we believe that sort of lawlessness has no place in the Australian building construction industry. That lawlessness puts up the cost of building hospitals, it puts out the cost of building roads, it actually takes jobs away from Australians looking to work in the building and construction industry. So I'm not surprised that you remain passionate and strident advocates for the rule of law in your industry because that is the industry in which militant unionism has been the most thuggish, has been the most lawless. And you've been at the coalface of that struggle for a long period of time and I thank you for your strength.

On the issue of jobs, 1.2 million Australians work in building and construction. One in 10 workers, the third largest employing industry behind retail and health services and there are trends we can be encouraged about. Construction is projected to record employment growth of 10 per cent over the five years to May 2023 and I'm thrilled about this because our Government is all about jobs. With help from industries like yours, we’ve created 1.4 million jobs since we were first elected six years ago and we made a commitment at the last election to create 1.25 million more new jobs over the next five years. But we will only achieve that with you if you, if your industry is in position to go forward and get things done and employ people and take up new projects. And that will include some 250,000 jobs for young Australians. 

Almost three-quarters of Australians today aged between 15 and 64 have a job. It has never been higher than that in Australia's history. This is the biggest job performance of any government at any time in this country. More Australians are in work today, not just in actual numbers because population is higher, but as a proportion of the working-age population than ever before. A lot of things have happened in the last six years, but none put a bigger smile on my face than young people in jobs. Last year, more than 100,000 Australians aged over 55 got a job. So it's not just young Australians getting more work but it’s Australians of all ages getting work, getting jobs. And when someone has a job they have choices, and you're in the business of giving people choices by ensuring they have jobs. 

Last week we also received the national accounts for the June quarter and it does show that Australia continues to grow. Now, we want to be growing higher than the level it is today but we're all very aware of the headwinds and the challenges that our economy faces today. Whether it's the global headwinds that we're all very familiar with or it's the domestic ones, particularly in relation to how issues of national disasters and drought has impacted on our national economy. But despite that, we continue to generate jobs as an economy. We continue to grow as an economy. We're in our 29th year of economic growth. I saw it reported the other day when they were talking about the difficult circumstances faced on the other side of the globe where they've had negative quarters of growth. Whether that's in the United Kingdom or Germany or parts of Scandinavia or even closer to home here in Singapore. They look at Australia now as an economy that has remarkably not experienced these things for a very long time and we're intending to keep it that way by having the right policy settings in place. 

When we put the Budget together last year it wasn't a surprise to us that these were the challenges that we were facing. When we put the Budget together the previous year and the year before that, Budgets where we have put together packages and plans to reduce taxes, to increase our spending on infrastructure. Most recently to lift our investments in skills. Since the election embarking on a deregulation agenda again in a new wave of initiatives that has been commenced under Assistant Minister Morton working with the Treasurer. Expanding our trade opportunities. All of this was being done because we know and understood the economic challenges Australia is facing. So it wasn't our plan, knowing all that, to put a higher tax burden on the economy. That wasn't happening. It wasn't our plan to take away the rule of law from the building and construction industry or give more power to military unions to undermine the performance of the building and construction industry. That wasn’t our plan but it was certainly our opponent’s plan. When we fashioned this year's Budget it was done to address the circumstances that we indeed now face and we will continue to implement that plan to ensure that our economy remains strong. 

But there are other parts of that agenda like the digital economy which I think is really transforming our economy and will have major impacts on productivity into the future and particularly in the building and construction sector. And I know from my experience working around this sector for a very long time, issues of payment security and payment is a big deal. And the cash flow that comes from those issues is the difference between your subbies or indeed your own principal’s industry builders getting through one quarter or not. And so the digitisation of our payments system is a fantastic way to ensure that we can speed up the payment times that occur particularly in your industry. And at the same time improve the integrity of payments within the building and construction industry. This is a major productivity booster. The new payments platform which is already up and running - I'd be encouraging you to get your members on it for no other reason than if you’re on it and the person you’ve got the contract with is on it then there's no excuse for you not to get paid quicker. The Government has moved to 20 day payment terms, encouraging the states to come down to the same level. In New South Wales they're doing the same thing. We want to see payment cycles come down. I want to see the acceleration of cash digital timers within the economy because I know that that can create greater confidence and give greater headroom to businesses to be able to invest, pay their staff and make plans for the future. And I think this is a big, big challenge for us. 

Now, in our program you'll be very aware of our big commitments to infrastructure and that infrastructure plan is over $100 billion strong. Almost half of that will be spent in the next four years. Around $10 billion of that will be spent this year. So when it comes to actually bringing forward infrastructure spending in Australia, you had me at hello. Because we're already doing it. We've been doing it now for some years with this program. At the last Budget, we increased it from $75 billion to $100 billion and from the day after the election, pretty much, I've been sitting down with Premiers and making sure that we're working with them to bring these projects on as quickly as we can. Now, of course, we're partners in these projects and we work with state governments in providing them with the resources to get on with those projects. That's why I'm pleased with the relationships that we have, particularly in New South Wales and indeed Victoria. So there's nothing partisan about it. I will work with anyone who wants to build stuff and get on with building stuff. And so the other day we made our announcement regarding the extension of funding for the Monash Freeway. Earlier in that week were out with the  New South Wales Government at the Western Sydney International Nancy Bird Walton Airport and some $600 million dollars in works that were going into civil works and earthmoving works for construction of that airport. You're very familiar with all the other infrastructure that sits around that major project. 

But it's not just that – there are 30 carparks in Melbourne we’re building and I want to see those built soon and built fast and that's what Alan Tudge is working with the Victorian Government on at the moment about to get as many of those projects happening as soon as we can. A lot of our congestion-busting projects in our metropolitan areas are just like that. But then you go out in the rural parts of the country and we've put a million dollars into every single shire and council that was affected by the drought. Why?

Because we wanted them to spend it on projects like the sort of projects that many members of those subbies or others who work to you are actually involved in to ensure that we kept the skills up and we kept the volume of work occurring in those regional areas.

So there is a very big, there is a very big infrastructure agenda. The tax cuts which we took to the last election, which Labor resisted, fought against, opposed, and then pretended support in the Parliament. Those tax cuts came out in July, and Australians will decide how they spend that money. That's up to them. But we believe people should keep more of what they earn, we believe you should keep more of what you earn, in what you do every day. That's why we've reduced taxes for the vast majority of businesses in this country because we know the money's better off in your hand than being sent here to Canberra or indeed anywhere else. But these projects will create jobs. Western Sydney Airport alone 11,000- and it's just the airport, I'm talking about the aero-tropolis, or the things that sit around that, that’s just 11,000 jobs there and 28,000 jobs ongoing with these projects. The Melbourne Airport rail-link $5 billion, the biggest game changing city building infrastructure project that Melbourne has seen in generations. Now why do I talk about in those terms? I mean not everybody here is involved in rail construction between, for a project like that there’ll be many builders who are involved in civil construction there’ll be builders involved in residential construction, commercial construction. When you have that link going up through sunshine with, what I call the quick-link, how others want to describe it that's up to them.

It’s got to be a quick link. Then those projects transform cities, they open up opportunities for commercial development they actually change the way cities operate. They create new hubs for employment. These projects whether it's Melbourne airport or whether it's Monash freeway. So people will get home sooner and safer, or to work for that matter sooner and safer or the Western Sydney airport or the North-South Link in Adelaide. These projects create opportunities for people to go invest in cities and in regions all around the country.

One of the other things we're working hard on is I want to see more tier two and three contractors in these big projects, and I commend the work that Michael McCormack has been doing working with the inland rail, in breaking these projects up into smaller contract sizes. And I commend the work that Gladys Berejiklian’s done in New South Wales with the Pacific Highway breaking these projects down. And when I last met with Premiers and Chief Ministers we talked about this at some length because there are very practical issues here. We don't have the depth of big head contractors in this country, we are investing a lot of funding in infrastructure at the moment and that has been necessary. I remember when I first spoke to Phil Lowe about these issues many years ago when I was Treasurer we agreed it was important to really invest in the infrastructure pipeline in this country and wherever possible bring it forward. So these discussions are not new. That's why we've been doing it, but making sure that these big projects can spread to other smaller contractors relieves some of the price pressures, some of the cost pressures. Now you still can have materials issues, that's that's just a natural thing particularly in the big metro areas which we have to contend with, but that doesn't mean that tier two and three contractors can't play a bigger role and provide greater competition in the procurement process that the states are involved in. And then again the smaller projects, be they a few million bucks on car park projects and things like this and local parts of our major cities, they're projects equally that I think can make a big difference and we're really excited for how they can be positive. Now two areas where we're particularly focused on at the moment when it comes to productivity that I think really impacts on the building sector.

Is the first one is, is the work we're doing on deregulation and what we did some years ago is we went and basically cleared out the equivalent of the back room in the in the office. a whole bunch of derelict regulation and legislation it was all out there. It mean you couldn't use that room anymore. But the removal of it was necessary.

But we understood that that didn't have the profound impact on reducing costs of regulation that I know business is hungry for. So we've commenced a new process since the election which Ben Morton is leading and he's already met with state and territory planning ministers and building ministers, as has Karen Andrews and she's working through those issues as well.

And what this is about, is looking at particular activities. So what is the regulatory anatomy of, to take one of the industries we're particularly interested in and that is the agribusiness industry, of which building is, the great thing about the building industry is they're pretty much connected to every single part of the economy there is. You’re building- everyone needs stuff built. And that's what you guys do. And when looking at these areas we're going okay. Someone wants to make an investment in building these businesses. What's all the regulation state, federal, local that applies to that entire timeline from the idea, through to shovels in the ground, and then actually completion of the project and looking at the things that cause the biggest delays. So it's not necessarily sometimes about how how much regulation you get rid of, although that's important. It's about which regulations you get rid of because there are some things with just slow the whole thing down.

And you know who knows what those things are? You do. Because you deal with it and it's important we then engage as heavily with the sector through the leader and your state counterparts to ensure that we can start chipping away and making some big differences in this regulation area. Now when I discussed this with Premiers and Chief Ministers they got it they did understand that at a macro level the importance he's had to supporting increasing productivity within their economies. So I look forward to the progress we're making there.

But the other area where I want to make a big difference is skills.

Now you've told us that you've often finding it hard to get the right people when you have a vacancy to fill particularly those of you who are working in the Eastern states. So we're supporting skills development in the construction industry in a number of ways. One of those is a $9.2 million apprentice training alternative delivery pilots program.

And I was pleased to see the Master Builders Australia took part in that and they received $1.84 million to lead one of those pilots which I understand was recently completed, the MBA pilot was focused on training to help young people get apprentice ready and there were hundreds of participants including secondary students and recent school leavers. Almost half of them took up further study for industry employment including apprentices and so on. That's a result and it's potentially life changing for those young people. We're creating 80,000 additional apprentices over the next five years in primary skill shortage areas through a new apprenticeship Initiative program. And we're also looking more broadly at a vocational education system and the Joyce review which is well known, I know, to the media but also to many who work in the sector.

Again an area where we can transform the funds that we invest in vocational skills training in this country actually do the most important thing. Someone gets trained with skills that a business needs in their business. That's what the ruler has to go- that's the ruler you have to put over every reform or change initiative when you look at vocational education training and that's the ruler I put on it. We hear the frustration and the Joyce review actually found this when they went and had a look at it. Young people and their parents frustrated that what they were paying for in training was not giving them skills that actually made them employable, an industry frustrated as- that what they were investing in for skills was not giving them the people that they needed. Now there were lots of trainers that were happy. There was lots of money moving around. There were lots of buildings and institutions that were, you know. But the point is getting someone trained with a skill that someone else needs, and that's the clarity I want to bring to what we plan to do in skills and I think the Joyce review has given us a really good pathway. And again I want to thank the Premiers and Chief Ministers for the early discussions we've had about this. We all know that the current system is not working. There’s a lot of money going into it and people coming and saying you need to invest in more skills. I'd be happy to invest more in skills but I'm not going to invest in dud projects that aren’t working. I'm not going to pour more money into a bottomless pit. That's not taking anyone, anywhere and I would think that industry will say the same.

You're investing in it too, you need people that you know can turn up on the job and add value each and every day. And there's nothing that I know thrills you more and I know this as a local Member of Parliament from southern Sydney in particular in the Shire, when I'm talking to people who’ve been builders, they don’t tell me about what they've built over the course of their career, particularly when you talk to a retired builder down at the football or wherever. They talk about the people they learnt with, the people they employed, the families that they had, the weddings they went to, they talk about the communities they created, and the love for what they did, they wouldn't want to do anything else. And it's tough and it's hard work, and it's got a lot of risk but often times the thing that keeps people in it, is the sense of responsibility that you have to the people you take risks to employ and you want to make sure that they can do well in life. And so our skills system needs to back that up but so does our safety and that's something I know the building industry is very committed to. Safety on the job and the safety that we build. We're taking a leadership role to address some of the extremely concerning building failures and issues we've seen in relation to non-compliant use of combustible cladding, the national construction code restricts the use of combustible cladding on high rise buildings and the states and territories are responsible for enforcing it. But that doesn't mean there isn't a role for the Federal Government. The Minister for Industry Science and Technology, Karen Andrews, has been facilitating cooperation with the states and territories as chair of the building Ministers Forum and in July it was great to see all building ministers agreed to a national approach on implementing the Building Confidence Report and establishing a dedicated team as part of the building, the Australian Building Codes board. See when it comes to solving these sorts of problems, everybody's got to do their job. There's a great temptation on these issues to try and manage upwards.

I'm a believer in the federation, always have been. I think states have important responsibilities and important roles and jobs to do, so does the Commonwealth Government. And so when issues occur that fall within the state domain, well I expect them to do their job and they should expect me to do what is the Commonwealth’s responsibility. But just shifting things between Commonwealth and state because of feeling of frustration because the State Government won't move. That's not the answer. We just have to get state government’s to move in those situations and through this process that's been occurring. And I think we're in a much better position today than we were some months ago in addressing those issues in the industry. But everyone has to take responsibility for their bit and be honest with each other and work together as a team. And that's how I think we continue to take the industry forward. So we're very aware of the pivotal role that you all play in our economy and we want to ensure that that continues.

We want to ensure that we have the right settings in place that enable you to employ people and get on and do what you love doing. I assure you that we will continue to listen carefully, because you do speak with an industry voice, an industry voice that is about your industry's interests not about any political parties interests, it's about your interests. I've always known that from the MBA and I’ve had an association going back well before I ever entered politics, be very forthright in the views that you put forward and you're always prepared to sit down and talk through difficult issues whoever you need to do that with. I want to thank you for your candour in doing that. I want to thank you for the strength that you've shown. But most importantly I want to thank you for the jobs you create. Let's go and create a lot more.

Thank you.