Budget for investment not cost overruns

Australian Constructors Association

Tonight’s Federal Budget has reinforced the urgent need to tackle the escalating costs of infrastructure nationwide or more projects will be put at risk.

Australian Constructors Association CEO Jon Davies says the $10.1 billion allocated to cover cost increases on existing projects, rather than new projects, is a wake-up call.

“We can’t afford to continue with business as usual; planning needs to be improved and construction costs need to be lowered to ensure the country can afford the infrastructure it needs,” said Mr Davies.

The Australian Government’s Future Made policy could be used to dramatically lower the cost of construction by investing in modern methods of construction (MMC).

“MMC has the potential to revolutionise project delivery by shifting more work to controlled factory environments. This standardised approach not only significantly boosts productivity but also mitigates site-based risks such as inclement weather, and offers safer, more flexible working environments.”

“MMC also aligns seamlessly with Australia’s ambitions for net-zero emissions.

“By reducing waste and minimising reliance on fossil fuels, MMC presents a pathway toward decarbonising the construction industry and meeting global emission targets.”

Mr Davies says the government has an important role to play in laying the groundwork for MMC adoption.

“By optimising project designs for manufacture and assembly and by standardising components of schools, hospitals, metro stations, bridges and other types of infrastructure across jurisdictions, a viable market will be created to support private sector investment in MMC manufacturing facilities. This investment could be accelerated by matched investment from State and Federal governments and by underwriting demand in the short term.

“The potential economic benefits are substantial. Closing the productivity gap between construction and other industries could boost the economy by $56 billion annually. This could fund essential services like the NDIS and build new schools and hospitals nationwide.

“Investing in MMC might not be as glamorous as quantum computing or solar farms, but it could transform Australia’s construction sector. This would ensure the country not only gets the infrastructure it needs, but when it needs it, and at a cost it can afford.”

About us:

The Australian Constructors Association is the only representative body for contractors delivering vertical and horizontal construction projects, as well as undertaking infrastructure asset management. Our members construct and service the majority of major infrastructure projects built in Australia every year. Our goal is to create a more sustainable construction industry.

/Public Release.