The Australian Constructors Association has welcomed the Queensland government’s response to a landmark productivity review, saying the measures acknowledge long-standing structural problems in the state’s construction sector and signal a need for far-reaching reform.

The government’s response follows the final report of the Queensland Productivity Commission, which found that declining productivity, flawed procurement practices and adversarial industrial relations were contributing to rising costs and project delays across the industry.

Jon Davies, the association’s chief executive, says the findings echoed warnings from major contractors that have gone unheeded for years.

“The Commission’s acknowledgement of these systemic problems, particularly the weaponisation of health and safety, is significant,” says Davies.

The association said it supported the government’s broader procurement reset, including a renewed emphasis on value for money, clearer allocation of risk and a commitment to greater use of standard contracts.

According to Davies, a shift away from lowest-price bidding could help change incentives in the sector.

“A genuine focus on value for money has the potential to move procurement from a race to the bottom on price to a race to the top,” he says, pointing out that innovation could ultimately reduce costs for taxpayers.

Still, the group cautioned that industry experience has not yet matched the government’s assessment of progress on standardisation.

Contractors continue to face extensive contract amendments and what the association describes as inappropriate risk transfer, which it says undermines productivity and deters participation.

The association also urged faster action to address barriers to market entry, pointing to minimum financial requirements and trust account rules that it says are discouraging competition in Queensland.

“Proposed reviews are welcome,” Davies says, adding, “but they need to occur urgently if industry capacity and confidence are to be restored.”

The government has accepted most of the commission’s recommendations, a move the association said reflects the scale of the challenge facing the sector. But implementation, it warns, will determine whether the reforms succeed.

“The permanent removal of Best Practice Industry Conditions is a strong start,” Davies says.

“But these reforms must be centrally coordinated, transparently tracked and driven with urgency, not left to individual agencies where momentum can be lost.”

He adds that other states should watch Queensland’s response closely, arguing that faster infrastructure delivery and better value for money nationwide would require confronting similar issues.

The association says it would work with the Queensland government and industry stakeholders to support coordinated implementation of the reforms.

Image source: Australian Constructors Association

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