Outcomes of productivity roundtable at odds with Institute's advice

The outcomes of the federal government's recent Economic Reform Roundtable, which aims to tackle Australia's slump in economic productivity, have been announced by treasurer Jim Chalmers at a press conference in Canberra on Thursday.

Of the ten reform directions agreed at the roundtable, Chalmers noted, "The third one was better regulation and how we cut the clutter when it comes to reg[ulation]. The fourth one was speeding up approvals in national priority areas. The fifth one was building more homes, more quickly."

Within these focus areas, Chalmers highlighted the opportunity for the government to act with urgency to boost housing - "to see where we can reduce complexity and red tape in the National Construction Code (NCC) - to do that in a balanced way which takes into consideration some of the concerns which were raised [from state regulators]," he said.

The federal government has since taken action on this issue by making the decision to pause residential updates to the NCC, following this year's scheduled changes, until mid-2029. The next round of code amendments were previously due in 2028.

A joint press release from Minister for Housing, Homelessness and Cities Claire O'Neill and Minister for the Environment and Water Murray Watt noted that the pause "excludes essential safety and quality changes," and ensures the NCC "maintains the strong residential standards adopted in 2022, including 7-star energy efficiency."

While the pause is underway, the government is looking to streamline the useability of the NCC through AI, remove barriers to the uptake of modern methods of construction, improve how code provisions are developed by the Australian Building Codes Board (ABCB) and explore an "appropriate" cycle for future NCC amendments.

O'Neill said, "We're pausing changes to the construction code and speeding up housing approvals - without cutting corners on standards."

In the leadup to the roundtable, the Australian Institute of Architects warned that pausing the NCC updates would harm, rather than help, construction productivity. Their media release stated:

Institute national president Adam Haddow added, "Building upgrades cost significantly less when the code is updated more frequently. A pause creates costly backlogs of quality and safety improvements that ultimately burden the industry and society."

In addition, Haddow emphasised that the triennial NCC review is necessary to ensure that buildings meet evolving expectations around health, wellbeing, inclusivity and accessibility.

"Ignoring expert evidence in the built environment is akin to knowing what causes cancer but doing nothing about it," he said. "Changes to the NCC improve people's lives - they are essential to delivering better homes for people."

On the topic of modern methods of construction, Haddow and Chalmers agreed that new and evolving building technologies and methods promised improved efficiency in construction, with Chalmers noting that there's "a lot of appetite in the room for prefab homes as a way of being more productive in housing and construction and also dealing with costs."

However, Haddow argued that the NCC's three-year review cycle ensures a clear framework for the private sector to invest in planned changes, and that "pausing the NCC undermines productivity by creating investment uncertainty and reducing business confidence."

"A pause in the NCC will not keep up with innovations that help us build better and quicker," he said. "We'll be left behind the international market."

Regarding regulatory approvals, Chalmers pointed out that more work with the states and territories was needed to speed up decisions, "including how we best make use of pre‑approval, conditional pre‑approval, and the planning in advance part of seeing more housing and other kinds of projects underway quicker," he said.

Chalmers will meet with state and territory treasurers on 5 September.