Opportunity knocks for construction in Australia

A change in federal government in 2022 could lead to the abolition of the Australian Building and Construction Commission (ABCC) and an increase in blue collar construction job wages.

This is the view of Joshua Saunders and Matt Coleman of Baker McKenzie lawyers who specialise in the construction industry, which was posted in The Fifth Estate.

With the federal election likely to occur in the coming months, and Victoria and South Australia holding state elections, these present opportunities in the form of new announcements for more major infrastructure projects.

“[This is] what we think are likely trends of the Australian infrastructure and construction industry over the next 12 months,” Saunders and Coleman explained. “As a result of COVID, including the rapid move to flexible working arrangements, we [also] expect that demand for commercial and traditional retail space will be very soft … this will have a major impact on construction.”

To mitigate impacts of any downturn in construction activity, Baker McKenzie expect state and federal government to support the economy by continuing to procure economic and social infrastructure.

The last two years have been difficult and so major design and construct contractors are now much less willing to accept open-ended time and cost risk, especially on major projects, the lawyers said. However, moves by Victoria and NSW toward collaborative contracting models will continue along with a shift away from PPPs, and models that share procurement risks, delay costs, unknowns and wage increases will be likely.

“As the Australian market becomes slightly friendlier for major contractors, we can expect to see continued interest from established, overseas contractors looking to take a share of the available work,” Saunders and Coleman said.

These contractors hail largely from Italy, Korea, Spain and Malaysia and they see Australia as a greenfield opportunity with a big project pipeline offering the ability to expand their global operations.

“As an international firm with a large global client base, we [Baker McKenzie] are aware of numerous examples of clients from overseas markets asking us to actively keep them updated on upcoming project opportunities in Australia.”

About the author

Desi Corbett

Desi is the Editor of Concrete in Australia and at the helm of our magazine for 8 years. She was behind the Institute's weekly news bulletins from 2016-2021 and is now writing our focused news items. Desi has been an engineering news and features journalist/editor across all disciplines since 2013 - part of a 30-year career writing for a wide range of industries.