An interesting article in today’s The Australian covering analysis by Tulipwood Economics’ Joe Branigan on the state government’s policy of Best Practice Industry Conditions (BPICs).
Mr Branigan found that BPICs “had hiked costs and driven down productivity for public projects valued at more than $100m,” slugging taxpayers at least $1bn each year – and should be scrapped. His analysis also showed that reforms to BPIC could help our industry claw back about $2.2bn annually in improved productivity.
It’s fair to say we are singing from the same song sheet here.
Among the priorities Master Builders has been advocating for in our Home Truths state election campaign, is for BPICs to be made more flexible.
Our analysis commissioned earlier this year by QEAS shows that depending on how the provisions in BPIC are applied, up to 96 working days are lost in a calendar year because of a lack of flexibility in the use of rostered days off (RDOs) and working hours generally. That means productivity is plunging to as low as 3 days’ work a week.
If BPIC is exercised to its full extent, the cost to build a two-bedroom apartment blows out by 33 per cent – from $870,000 to $1.16m. This can flow on to the private sector because trades expect similar conditions whether it’s a BPIC project or not.
Premier Steven Miles is quoted in the article saying that there was no evidence of BPIC’s pushing up construction costs in Brisbane. The point the Premier misses is the loss of productivity – achieving 3 or 4 days’ work a week means projects take longer & cost more. This is not about wages.
Since 2018 the Queensland government has unashamedly required contractors to adopt BPIC on state government projects worth more than $100 million.
Last week, we published our election scorecard, expressing disappointment at both Labor and the LNP’s response to BPIC. While the LNP has pointed to a review of regulation in our industry as the first order of business for a re-established productivity commission, which we support, we maintain the evidence is already there – and action should be taken.
Irrespective of the outcome on Saturday, we will continue to work with government and the CFMEU to restore productivity in the building industry. We back Mr Branigan’s findings – it’s time for an end to the hold BPICs have on the construction of the schools, hospitals, and community projects our state needs.