The much-anticipated 2021 Australian Infrastructure Plan did not disappoint with its recommendations, but it fell short in one critical area—its implementation timeframes. The pandemic has created a once in a generation opportunity for reform and there has never been a more important time for the nation to deliver an Infrastructure Plan.  

All levels of government are relying on the construction industry to lead the economy forward on the basis that every dollar spent on infrastructure has a $3 kick on to the wider economy—but our industry is broken. Construction accounts for almost 25 per cent of all insolvencies in Australia, only 12 per cent of the workforce are women and construction workers are six times more likely to die from suicide than a workplace incident. 

Pleasingly, detailed in Chapter 3 Industry productivity and innovation of the plan are good recommendations that closely align with the three pillars of a sustainable construction industry which the Australian Constructors Association has been fiercely advocating for. If enacted, these recommendations will improve industry culture, create increased capacity and capability, and ensure that commercial frameworks are equitable and align the interests of all parties. 

The next critical step is getting the Federal Government on board. The Federal Government urgently needs to step up and coordinate and incentivise reform. While we are starting to see some green shoots of change through forums such as the Construction Industry Leadership Forum and the Construction Industry Culture Taskforce, it is not enough. We cannot afford to wait 5, 10 or 15 years, the record spend is happening now, companies are going out of business now, people are leaving our industry now. 

Below is an inside look at the recommendations the Australian Constructors Association has mapped to our industry’s key sustainability pillars. Speaking on behalf of the entire industry, we are ready and waiting to support governments implement these reforms. 

Key recommendations for the construction sector 

Improving planning, portfolios and pipelines 

Recommendation 3.1: Improve industry productivity and value for money by having a coordinated project pipeline with a mature approach to procurement and risk management (5-10 years; led by States). 

Enhance project outcomes 

Recommendation 3.2a: Improve value for money and reduce risk by consistently adopting appropriate best-practice front end due diligence for projects (0-5 years; led by States). 

Recommendation 3.2b: Reduce uncertainty for industry and improve value for money by improving engagement with industry and the supply chain (0-5 years; led by States). 

Digital by default 

Recommendation 3.3: Increase productivity and embed a culture of innovation in the infrastructure sector by adopting an evidence-based digital by default approach to infrastructure planning, delivery and operations (5-10 years; led by the Federal Government). 

Next generation infrastructure investment 

Recommendation 3.4: Deliver a greater return on investment by ensuring governments act as model clients and custodians of industry health and productivity (5-10 years; led by the Federal Government). 

Equitable and aligned commercial frameworks 

Recommendation 3.1: Improving planning, portfolios and pipelines 

The plan details valuable activities such as advancing project pipelines with annual briefings to provide a clear view of expected procurements and act as a forum for feedback on pipeline risk. Earlier supply chain involvement, standardised design elements and project processes, templates and assurance activities that prioritise industrialisation also feature as activities to be pursued. Importantly, the plan identifies that a whole-of-government response would lead change and productivity improvements, and we firmly believe Federal Government should lead this work.   

Recommendation 3.2a: Enhance project outcomes – improve value for money and reduce risk  

The plan calls for States to reduce risk, improve competition, lower bid costs and improve project outcomes by consistently applying due diligence activities to the front-end of all infrastructure projects. It also calls on States to improve value for money by applying whole-of-life cost, scheduling and risk management best practices, processes and systems.  

A key activity called out in the plan is the development of a nationally consistent whole-of-life infrastructure cost and schedule benchmarking tool to be mandated on all nationally significant projects.  

While the intent may align, the Australian Constructors Association does not completely agree with phrasing of comments regarding the transfer of risk. The plan recommends government ensure that a strategic view of risk is appropriately translated to project procurement by developing and applying mature risk allocation processes that comprehensively assess and validate risk and uncertainty and fairly apportion them to the parties best placed to manage them. A strategic and mature allocation of risk is welcomed. However, consideration needs to be given to the party best able to carry the financial element of the risk i.e. whilst it a contractor may be best placed to manage a risk contractors should not to compete on the basis of their willingness to price risks that cannot reasonably be quantified.   

Recommendation 3.2b: Enhance project outcomes – reduce uncertainty and improve value for money 

The plan calls for States to reduce risk and improve value for money by using common and best practice commercial arrangements, standard contract forms and delivery approaches to infrastructure. Further, it calls for States to create a culture of genuine innovation by clarifying the desired project outcome innovation criteria in bid requirements, including outcomes, value for money, risk and embedding successful innovation in future projects. 

To do this, the following activities are identified:  

  • more collaborative commercial contract models to facilitate value for money  
  • new nationally consistent contract suite to support a spectrum of procurement models  
  • development of guidelines and training programs on market engagement best practice  
  • alignment of innovation criteria in bid assessments with project and organisational needs  
  • conducting constructability, operability and maintainability reviews at multiple states of each project’s lifecycle including before award.  

It is critical that the Federal Government lead and coordinate this recommendation. A nationally consistent contract suite is welcomed; however, the plan’s suggested measure of ‘80 per cent of projects or programs over $250 million that use a nationally standard contract suite with the integrity maintained’ has a timeframe of 10–15 years. An interim measure in a shorter timeframe is desperately needed. Further, it should be noted that the plan does not mention performance-based specifications as a means to improve innovation. This is an area in which the Australian Constructors Association will continue to advocate.  

Recommendation 3.3: Digital by default 

Reflecting on the recent report by Infrastructure Australia outlining the progress made since the 2016 Australian Infrastructure Plan, the Australian Constructors Association fears a similar lack of progress in improving productivity and embedding a culture of innovation will be a huge missed opportunity once again.  

The outcome of increased productivity by increasing digital adoption in infrastructure planning, delivery and operations, led by the Federal Government, has a 5–10-year timeframe. 

Activities include all Federally funded projects to adopt innovative approaches across lifecycle including BIM and digital engineers within 0-5 years, and implementation of a national digital infrastructure roadmap establishing an Intelligent Infrastructure Innovation Scheme within 5-10 years. Some of these timeframes are unnecessarily long and need to brought forward. 

They also ignore some of the fundamental impediments to increased adoption of digital technologies such as contracts that don’t promote open and transparent sharing of information and professional indemnity with shared data models. 

Recommendation 3.4: Next generation infrastructure investment 

One of the ‘outcomes’ is a unified and central vision for Australian Infrastructure within 5–10-years. The Australian Constructors Association is very supportive of this outcome and the establishment of the government and industry collaborative leadership group identified in the plan would assist this. This leadership group has been touted for over 12 months and it is disappointing its establishment has been set with at a 5–10-year horizon when it could easily be implemented within months if the government was minded to do so. 

 The plan also identifies updating of the Commonwealth Procurement Guidelines including a clearer and broader definition of value for money. This is a key focus area of the Construction Industry Leadership Forum, of which the Australian Constructors Association is a member, and we expect the group’s work to be completed in the near term. It is expected this could be rolled out at a national level expediting the 5–10-year timeframe outlined in the plan.  

Capability, capacity and skills 

Recommendation 3.1: Improving planning, portfolios and pipelines 

Identified outcomes over the next 5 years include improving industry capacity and capability by prioritising procurement and portfolio management and increasing pipeline transparency, certainty and confidence; and ensuring the industry is a sector of choice for employees and can meet current and future workforce demands by introducing cultural reform that embraces diversity and inclusion.  

A key action is to develop a workforce attraction and retention strategy in partnership with industry to create a sector of choice. The plan identifies a timeframe of 5-10 years for this action. This, again, is too long. We cannot afford to wait even 5 years. The record spend is happening now and people are leaving our industry now. Without more workers we will not be able to deliver the pipeline of projects. 

Recommendation 3.4: Next generation infrastructure investment  

Activities include strengthening government capabilities by establishing an office focused on infrastructure project delivery excellence and asset registers to be facilitated by a community of practice between governments, industry and academia promoting excellence in capabilities, processes, audits and systems. Again, with a measure of 5-10 years for establishing a permanent Australian Government infrastructure project delivery capability is too long.  

Positive industry culture 

Recommendation 3.1: Improving planning, portfolios and pipelines 

An identified outcome for the next 5 years, led by the Federal Government, is to ensure the industry is a sector of choice for employees and can meet current and future workforce demands by introducing cultural reform that embraces diversity and inclusion. Activities include developing an infrastructure industry culture commitment and policy aimed at improving project delivery, embedding the culture commitment through existing procurement frameworks and prequalification schemes, and improving the productivity and attractiveness of the sector by adopting and promoting a 5-day working week, working hour limits and job-sharing practices across the public and private sectors.  

The 5–10-year timeframe for development of an industry culture commitment is again unnecessary and too long. The Australian Constructors Association through the Construction Industry Culture Taskforce has been working with the NSW and Victorian Governments to develop a culture standard. When finalised, government will be able to influence the sector by using their buying power to drive positive culture change through adoption of the standard. Again, the Federal Government needs to take the lead and it can do this through the National Partnership Agreement.   

Closing remarks 

The Australian Constructors Association congratulates Infrastructure Australia on its extensive collaboration with industry in the development of the Plan. The recommendations are evidence of a strong engagement program. Many of the recommendations for the construction sector are identified as ‘low-hanging fruit’ with lower barriers to reform.  

Infrastructure Australia has played its part. It is now over to the Federal Government to ensure the report doesn’t gather dust on the shelves. The entire industry is ready and waiting to support the government in implementing these reforms.