Qld brings back the state’s Productivity Commission
After a four-year hiatus, Queensland has reinstated its Productivity Commission, set to immediately review the state's building and construction industry.
The Queensland Productivity Commission Bill 2024 passed Parliament yesterday, marking a key step in restoring productivity, improving living standards, and driving economic growth.
First abolished in 2021, the new Queensland Productivity Commission (QPC) will tackle the state’s economic challenges, offering the government advice and recommendations for solutions.
The QPC will immediately review the state’s building and construction industry, cutting unnecessary red tape while encouraging innovation.
Additionally, it will deliver the state’s first Intergenerational Equity Report, highlighting key issues across generations in Queensland and the long-term policy solutions required.
Treasurer David Janetzki said the Productivity Commission will drive down the state’s cost pressures and drive up productivity.
“The Productivity Commission model has been proven to have a real impact on government-led economic improvement both at a national level and in other states.
“We need to cut unnecessary red tape to encourage creativity and innovation, and build a highly skilled public service to deliver better and more services,” Janetzki said.
The Real Estate Institute of Queensland (REIQ) has welcomed the Queensland government’s revival of the Queensland Productivity Commission, which is crucial to address construction costs and improve housing affordability.
REIQ CEO, Antonia Mercorella, said the QPC’s role would be instrumental in reversing a long-term decline in the construction sector’s productivity.
“Improving productivity in the construction sector is critical for reducing construction costs and, ultimately, improving housing affordability for Queenslanders,” Mercorella said.
She noted previous findings from the Australian Productivity Commission revealed a 12 per cent decline in labour productivity in the construction industry since the mid-1990s.
The figure showed that labour productivity is declining despite a 49 per cent increase across the broader economy.
Additionally, Queensland recorded some of the highest construction cost increases in Australia over the last five years.
The Producer Price Index for house construction rose by 47 per cent from December 2020 to December 2024, compared to 39 per cent nationwide.
Mercorella warned that the productivity slowdown and escalating costs posed significant economic risks.
“This productivity slowdown and cost escalation has serious implications, and the QPC’s focus on investigating the drivers and researching solutions is a win for housing and the economy,” she said.
Property Council executive director, Jess Caire, said declining productivity in the construction sector had contributed to the ineffectiveness in housing supply.
“Stagnant productivity in our construction sector is one of the key factors contributing to the lack of supply across all property types, most notably in the housing sector,” Caire said.
“Queensland is on the precipice of an exciting period of growth, requiring a significant amount of housing, businesses and infrastructure, and it will be imperative to lean into every opportunity to bolster productivity, maintain safe worksites and embrace ongoing innovation.”
Mercorella said recent data from the Housing Industry Association (HIA) showed that a significant part of the housing costs stem from tasks, regulatory expenses and infrastructure obligations.
“The QPC could play an essential role in identifying and addressing additional costs imposed by taxes, duties, regulations and constraints on housing supply,” she said.
She added that enhanced productivity and reduced regulatory barriers could foster innovation and create new opportunities to tackle Queensland’s complex housing challenges.
“The REIQ called for a focus on Queensland’s productivity challenges in our state election policy platform, and we are pleased to see this issue being addressed in order to support our economy and a healthy and sustainable housing industry for all Queenslanders,” Mercorella concluded.