Home' Future Building Australian Infrastructure Review : Volume 3 Number 2 Contents 84 futurebuilding Volume 3 Number 2
Graham Bradley AM
estimators around the world to assess resource
and industrial project performance because of its
market size, and the depth of project management
and delivery capabilities that exist in that region.
The comparison provided a useful indicator of
some of the relative performance of project activity,
which is similar to our national pipeline. It is also
relevant to compare ourselves to this particular
region because, in the case of oil and gas projects,
which make up the largest part of our resource
pipeline, we are going to be competing directly
with them in the decades ahead.
On public infrastructure to be delivered, the
project data was sorely lacking, pointing to a need
for far more to be done in Australia to evaluate
infrastructure project delivery performance, so that
we can benchmark ourselves against competitors
around the world more accurately. Based on what
data was available, the Turner and Townsend
Construction Cost Survey indicated that, in Australia,
hospital projects were some 60 per cent higher in
cost, airports were 90 per cent higher in cost, and
shopping centres 40 per cent higher in cost than their
counterparts in the United States.
The high Australian dollar partly explains these
ndings, but we also have a pressing need to lift our
project cost and productivity performance if we are
going to remain internationally competitive. We can't
simply rely on a depreciation of our currency.
Our study also drew on ABS data on the cost
of infrastructure delivery, which showed that from
2000 to 2010, costs rose at twice CPI, with labour
costs rising faster than materials, plant hire, or other
project input costs in Australia.
Now, just a few months since the study was
launched, our concerns are being re ected on an
almost day-by-day basis, with announcements by
companies planning major projects.
We found the capacity constraints were making it
dif cult to source the skilled labour needed to deliver
the large and simultaneously undertaken projects
across our economy.
We found a host of factors that detract from the
cost ef ciency of delivery of projects, in particular
cumbersome, time-consuming and expensive
approval processes and low workplace productivity.
We found low levels of community and government
support for many of these projects, and closely
connected to that, we are not using our current
opportunities to envisage and plan for what will come
next. These issues are of enormous signi cance. They
require a concerted effort by all levels of government
and by the business community to ensure that
Australians can see the bene ts of the projects that
will drive our future economic wellbeing, and also
drive governments to support the necessary economic
reforms, and politicians to nd the courage to act on
Now let me turn to the labour issues; rstly,
labour capacity constraints.
The problem, and this has been much talked
about, is most acute in regional locations, but it
also affects projects in our major cities, which are
competing for the same limited pool of specialised
For project owners, people with experience in
managing and delivering major projects are highly
valued, but are not readily available. Factors causing
the most concern include low labour mobility. We
know that it's dif cult and expensive to attract people
to the places where we need them, and that there's a
high cost to do so on a y-in y-out basis.
The inadequacy of skills training and retraining in
Australia is another issue. We're struggling to keep up
with the skills required for new investment projects.
Lastly, we have unhelpful immigration policies.
While some exibility has been built into the
migration schemes, businesses continue to face
barriers in sourcing the workers that they need to
deliver projects with the least cost and delay.
Existing requirements to comply with the
Enterprise Migration Schemes for qualifying
projects should not be made more onerous than
they currently are.
In our study, the BCA put forward a detailed
set of reform recommendations to address labour
and skills shortages. The starting point should be a
comprehensive analysis of the skilled workforce
needed to deliver our investment pipeline in its
entirety, so that we have a better understanding of the
likely sequence of these projects across the next ve
and 10 years. This has actually not been done in any
systematic way, and as a consequence, we are largely
ying blind in our understanding of what the total
skills need for our country will be.
Unless the supply of skilled labour is increased,
there will be more and more competition for the
same limited pool of workers, which has far-reaching
consequences -- particularly on costs during the
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