Construction Productivity Reform: What the Queensland Government’s Response Means for Industry

The Queensland Government has committed to significant reform of the construction sector following the release of the Queensland Productivity Commission’s final report into industry productivity. The independent inquiry found that productivity in Queensland’s construction industry has declined by around nine per cent since 2018, contributing to an estimated 77,000 fewer homes being delivered over that period. It also highlighted that labour productivity in the sector has grown by only five per cent over the past thirty years, compared with sixty-five per cent growth across the broader economy. These findings reinforce long-standing concerns raised by industry about regulatory complexity, procurement inefficiencies and workforce pressures that are constraining the sector’s capacity to deliver housing and infrastructure.

Government response to the Productivity Commission report

The Queensland Government has agreed or agreed in principle to 51of the 64 recommendations in the Productivity Commission’s report, signalling a broad reform agenda aimed at improving productivity, reducing red tape and strengthening workforce capability. Key reform areas include procurement, regulation, workplace practices and training.

Key reforms proposed:

Procurement and industry settings

The Government has committed to several changes designed to improve access to government work and reduce administrative burden on businesses, including:

• Permanently removing Best Practice Industry Conditions from procurement policy
• Removing subcontractor pre-qualification requirements on government construction projects
• Reducing complexity in procurement frameworks and removing barriers to innovation and competition
• Reviewing regulator powers in conjunction with the Wood Commission of Inquiry

These reforms are intended to increase competition, improve productivity on construction sites and create more opportunities for small and medium-sized businesses, including regional contractors.

Workplace health and safety and industrial settings

The Government will also provide clearer guidance on workplace health and safety regulation, including:

• Mechanisms for managing WHS disputes
• Guidance on the use of right-of-entry provisions
• Improved clarity around regulatory processes

These measures aim to ensure safety remains the primary focus while reducing unnecessary disruption and uncertainty on construction sites.

Workforce and training reform

Recognising that labour shortages are a major constraint on productivity, the Government has committed to reforms to strengthen workforce pathways, including:

• Introducing a less prescriptive and better-targeted policy to increase the number of construction apprentices
• Reviewing training courses to ensure skills required for modern methods of construction are addressed
• Progressing participation in the Automatic Mutual Recognition scheme
• Streamlining licensing processes for migrants

These initiatives are designed to improve workforce supply, mobility and skills alignment with industry needs.

Next steps

The Government has indicated that work will continue across departments to prioritise and coordinate implementation of the recommendations, with further consultation with industry stakeholders planned.

For industry, this represents an important opportunity to reset policy settings and address long-standing barriers to productivity.