Leading construction bodies are urging the government to change its approach to skilled migration and bring in more migrants to ease the shortage of tradies.
Industry bodies say a chronic shortage of workers across 12 different trades is impacting housing prices and affecting the flow of new homes into the market.
Master Builders, the nation’s peak building and construction industry association, anticipates at least half a million workers must enter the construction industry by 2029 just to keep up with current construction demands.
That number does not account for the government target of building 1.2m new homes for the national housing accord, the transition to net zero or any other goals.
In March, BuildSkills Australia said 90,000 new tradies were needed between then and the end of 2024. But according to the Australian Bureau of Statistics the industry is falling well short, hiring just over half that number.
The huge shortage in workers is the largest contributor to growing construction costs, according to Master Builders, and one of the key reasons the industry has been unable to build enough new homes to meet demand and ease the housing crisis.
In an April survey of Master Builders members , 85% said it was a struggle to find suitably qualified workers and 66% said sourcing workers was the biggest issue facing the industry.
Denita Wawn, the CEO of Master Builders Australia, said the industry was “extraordinarily desperate” for more workers, and that migrants were the answer in the immediate term.
“Labour shortages are currently the biggest handbrake on new home building and infrastructure projects. If we’re to have any hope of building 1.2m homes we need to get more skilled tradies into the country and quickly,” she said.
“Skilled migration is a vital piece of the workforce puzzle in the building and construction industry. In the short term, we cannot address labour shortages through domestic apprenticeships alone.”
She said construction costs had blown out by 40% since the pandemic, and attributed a large portion of that increase to labour shortages.
Wawn said she was “perplexed” that tradespeople were ignored by the government’s migration strategy, unveiled in 2023.
As part of the changes, a “skills in demand” visa was proposed, but the occupation list did not include any trades.
That new system splits the pathways into three strands: specialist skills, essential skills and core skills pathways.
Because trade workers cannot enter Australia through the specialist skills or essential skills pathways under the proposed system, Master Builders wants the government to add all building and construction trades to the core skills cccupation list.
A spokesperson for the home affairs department said the government was currently “considering advice from Jobs and Skills Australia on the Core Skills Occupation List and will release its final decision shortly”.
They also pointed to more than 11,000 skilled visas granted to workers in the construction industry for the 2023-24 program year under the old temporary skill shortage visa, the highest number in nearly 10 years.
But the latest Housing Industry Association (HIA) trades availability index showed the shortage of tradies has been worsening, dropping to -0.54 in the September quarter from -0.49 the previous quarter.
Matt King, a senior economist at HIA, said the lack of workers was a major problem.
“While the severity of shortages varies across Australian markets, all capital city and regional areas are experiencing a consequential shortfall in skilled trades, which is acting as a significant constraint on new home building,” he said.
“Australia does not currently have enough tradies to build the number of homes needed to house the population and take pressure off housing costs.
“Trades prices are running at an annual growth rate of 3.4%, which is much higher than the 2.0% average over the decade prior to the pandemic.”
He pointed to the “stiff competition” for workers, including “buoyant” non-residential construction activity and the pipeline of government-funded engineering and construction projects.
The index showed bricklaying, tiling, plastering and carpentry were suffering the most acute shortages of skilled tradespeople.
HIA and Master Builders are calling for a streamlining of pathways to get more Australians into the industry, but both groups see immigration as an essential short-term fix.
Trent Wiltshire, the deputy program director of Grattan Institute’s economic prosperity program, said it was important the government better recognise qualifications from non-English speaking countries.
“We don’t often recognise the qualifications from most countries, and we require people from these countries to jump through more hoops to be able to work here.”
He said that mindset “reflects the risk appetite” of government.
“Recognising overseas qualifications, where we can, is a really key way we can streamline the process and get more construction workers in.”
