Worker shortages dampen surge in green energy, housing
Public investment in green energy and social housing has increased, but labor shortages and slow productivity growth are causing projects to lag.
Tens of billions of dollars were added to Australia’s massive infrastructure pipeline last year, according to a report by federal advisory body Infrastructure Australia on Thursday.
An extra $29 billion has been added to major public projects over five years, bringing that amount to $242 billion, as federal and state governments step up targets to tackle housing affordability and the energy transition.
This is the highest outlook since the agency began tracking government infrastructure investments across the country in 2020.
Transportation investment still accounts for the majority of the pipeline at $129 billion; This is two percent higher than the previous year’s outlook.
However, due to the growth in housing and electricity transmission infrastructure, the share of transportation projects in total investment is decreasing.
State and territory governments are responsible for the majority of the $44 billion invested in social and affordable housing projects; This figure is an increase of more than 12 percent compared to 2024.
But increased investment in the sector has also been driven by the federal government, with its $2 billion social housing accelerator program and $10 billion Housing Australia Future Fund funding tens of thousands of homes.
Infrastructure Australia estimates social and affordable housing accounts for eight per cent of the total $540 billion housebuilding pipeline.
“The lion’s share of this is developers and mums and dads,” Infrastructure Australia CEO Adam Copp told AAP.
“But governments are investing much more in housing than they have recently.”
All these investments are worthless if the construction industry does not have the skills and resources to turn it into new homes.
With around 204,000 workers in construction, Infrastructure Australia estimates the industry is missing about 141,000 workers.
Builders have called on the federal government to change immigration landscapes to bring in more skilled construction workers from abroad.
But Infrastructure Australia has called on the industry to do more to attract and retain more domestic workers as young people’s preferences change.
“It’s a pretty tough industry to work in; very long hours, quite a lot of conflict,” Mr. Copp said.
“So we think there’s definitely a lot of work to be done to attract people into the industry, but we need to focus on the culture in the industry more broadly.
“Having more diversity, having more women and making this a great place to work.”
Inadequate productivity growth also hinders new home construction.
A study by the Australian Economic Development Committee found that the average construction worker is building half as many homes a year as in the 1970s. last work.
“We need to do more with less, and so one of our key recommendations is to encourage the market to try productivity-enhancing innovations such as modern construction methods,” Mr Copp said.
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