The Queensland Government has announced a pause on the use of Best Practice Industry Conditions (BPICs) on new government funded construction projects to boost productivity.
Following through on its election commitment, the Government will introduce legislation to re-establish the Queensland Productivity Commission (QPC) by the end of 2024, with its first order of business a review of the Queensland building industry.
Until the review has occurred and the government has responded, BPICs will be paused.
It follows revelations from Treasury modelling if BPIC continued in its current form, Queenslanders would pay an additional seven per cent rent over the next five years and 22,000 homes would not be built across the State.
BPICs have applied to government construction projects costing more than $100m and set conditions on employment terms. BPICs require the prequalification of contractors and subcontractors before being able to undertake major government project work, limiting the pool of available contractors and sub-contractors.
Independent economic modelling by Queensland Treasury over 2024-30 estimates BPICs are likely to increase project costs by up to 25 per cent and create a net economic cost of up to $17.1 billion.
Minister for Housing and Public Works Sam O’Connor said not only would BPICs impact housing, but they would also impact energy projects.
“Independent Treasury modelling shows Queenslanders will pay more to rent a home and there will be fewer homes built in our state under the current BPIC conditions, it would be irresponsible to ignore this advice in the face of a housing crisis,” Minister O’Connor said.
“If BPICs were to continue, they would also apply to energy and storage projects implemented by Government Owned Corporations, placing upward pressure on electricity prices and household cost of living.”
Property Council’s Queensland Executive Director Jess Caire said the decision was sensible given the unprecedented challenges in delivering projects in Queensland.
“It has never taken longer or been more expensive to deliver projects in Queensland and referring BPIC to productivity review is a sensible move to assess its impact and look at how productivity can be improved across the state,” Ms Caire said.
“In the midst of a housing crisis and with a record infrastructure pipeline to deliver we simply cannot afford to continue on this path of stagnating productivity.
“The Property Council supports safe worksites and we also support productive worksites and there is no reason we cannot achieve both here in Queensland.
“Queensland has earned itself the unenviable perception as the least productive state and at a time where we need to deliver critical infrastructure and homes we need to pull all available levers to shed this label.
“Referring BPIC to a newly re-established Queensland Productivity Commission sends a strong message to industry that Queensland is serious about being more productive and delivering upon its housing and infrastructure targets.
“While BPIC only applies to government jobs the economic flow on impact is felt by the private sector and has inhibited capacity to deliver homes and projects at the worst possible time.
“At the end of the day it is everyday Queenslanders who bear the brunt of delayed projects and escalating costs.
“Given we are in the middle of a crippling housing crisis addressing our productivity woes must be prioritised. We cannot stand by while people sleep in cars and do nothing.
“In the lead up to the election, the Property Council advocated for several measures to cut red tape and improve efficiency.
“The government’s decisions to re-establish the Queensland Productivity Commission and review BPIC is a swift and welcome measure.
“We look forward to continuing to work with government including providing input into the Terms of Reference for the Queensland Productivity Commission’s review into building productivity in Queensland,” Ms Caire said.