IPWEA NSW & ACT State Conference

Publication Date
22 March 2023

Good afternoon everyone. Thank you to IPWEA NSW & ACT for the invitation to participate in today’s robust and critical discussion about how we can harness data and technology to build better communities across Australia. And thank you to all who have taken the time to attend and be part of this important conversation. 

Before I begin, I’d like to pay my respects to the Wann-gal people, the traditional owners of the land on which we meet today, and pay my respects to their elders past, present and emerging. 

Australia’s infrastructure market is at a critical juncture. Our infrastructure ambitions have never been larger and unfortunately, neither have the headwinds. 

The massive major projects pipeline across Australia is driving unprecedented demand. This is happening against a backdrop of severe labour shortages and supply chain disruptions that are causing huge delays and price hikes for materials. 

It’s a perfect storm that is bringing construction companies to their knees and threatening budget blowouts that will hit the public purse.  

It’s no longer a question of if a project will slip – the question is when, by how long and at what cost.  

Infrastructure Australia first started researching and reporting on these market capacity constraints in 2020, after the Prime Minister and First Ministers requested we do so through the Council of Australian Governments. 

Since then, we’ve been working with state and territory governments and industry across Australia and the globe to source unique data-set, investigate the issues and find a pathway forward, releasing reports annually.  

Unsurprisingly, one of our key recommendations for helping to solve this issue is data and technology – it’s one of the most powerful tools we have in our arsenal to enable the industry to do more with less.  

Around the time we were tasked with this work, we were also focused internally at Infrastructure Australia on the importance of data and technology, restructuring the organisation to create a new Digital and Data team.

IA has assessed more than 100 business cases over the years and conducts an audit of nationally significant infrastructure every 5 years – collecting a huge amount of valuable data along the way. 

We recognised that data was an asset that was being under-utilised. If we could leverage new and emerging technologies to slice and dice the data we hold in new and different ways, we could unlock huge possibilities, transforming that data into an even more valuable asset that would go a long way toward supporting good decision-making by government. 

When we started working on the market capacity project in 2020, IA gathered project data from all states and territories, tracking the projects and predicting what their resource demands would be. 

It took four months to wade through the thousands of projects, matching various data sources, removing duplications.  

Internally, we adopted the motto ‘Digital by Default’ – if we’re telling the industry that data and technology are the way of the future, we needed to walk the walk.

By the following year, and with our Digital and Data team now established, we created a machine learning model using Artificial Intelligence to automate the MC process. In 2022, a process that previously would have taken the team four months, was complete within a matter of hours, and with a 90% accuracy rate.  

It’s been a game-changer for our productivity. And this is just the beginning, with some exciting possibilities currently being explored. 

These are the types of productivity gains to be enjoyed if our industry as a whole can better leverage the data and technology we have available today.  

It’s not a silver bullet to the pain that’s currently being felt across our industry by everyone from the local tradie to governments right around the country – of course, there are still external factors to contend with. But it is a powerful antidote. 

Indeed, the very reason we were tasked with researching and reporting on market capacity constraints was to provide data to governments to support them in making decisions to alleviate the pressure on their respective infrastructure pipelines. 

Reassessing project pipelines is the first and most immediate step governments can take to address this issue but to do that effectively, you need the data. That then enables governments to be proactive and avoid budget blowouts and delivery delays that ultimately mean the taxpayer gets less infrastructure for their dollar. 

As our 2022 market capacity report highlights, Australia’s major public infrastructure pipeline (projects over >$100m; >$50m in smaller states) increased by $15 billion over the last year alone.   

The five-year pipeline is currently valued at $237 billion with NSW, Victoria and Queensland accounting for more than 80 per cent of that investment.  

But productivity within the Australian construction sector has remained stagnant for the last 30 years.  

While industries such as manufacturing and transport have been on an upward trajectory in productivity, the Australian Bureau of Statistics’ Multifactor Productivity Index shows construction is still exactly where it was in 1990. 

Why is that? Well, one reason is the sector’s desperate need for cultural reform.  

Our research shows that labour scarcity is the single biggest issue facing construction companies.  

It is clear that there are real cultural problems to solve within the sector if we are to attract the workforce necessary to deliver Australia’s infrastructure pipeline. 

We know that working in construction takes a physical and mental toll. It’s no secret that it can be a tough place to work. 

Research by BIS Oxford Economics finds that cultural issues in the sector are costing the Australian economy nearly $8 billion annually due to workplace injuries, mental illness, suicide, long work hours and a lack of diversity. 

It’s not hard to see why the construction industry has an issue attracting and retaining workers.  

And when it comes to having the people available to do the work, supply will not even come close to meeting the demand this year based on current projections.  

Labour shortages continue to plague the sector, with a shortage of 214,000 skilled workers as of October 2022.  

This year, labour demand is projected to grow by 42,000 to a peak of 442,000 which is more than double the available supply expected.  

Meanwhile, women make up just 12 per cent of the construction workforce – that’s not good enough for a sector that is Australia’s third largest employer.   

We need to do more to attract young women to the industry and we need the industry to make diversity and inclusion a business priority.  

An industry with a healthier culture and improved diversity will also be more a productive industry. 

The reality is, you can’t be what you can’t see – we need more women in leadership roles across the industry.   

Already there is some good work happening in this space, including the work of the Construction Industry Culture Taskforce to develop and implement a new Culture Standard for the industry.  

The 2022 Jobs and Skills Summit also delivered action in this space with the Australian Government and states and territories agreeing to a billion-dollar National Skills Agreement to provide additional funding for fee-free TAFE in 2023, while a longer-term agreement to drive sector reform and support women’s workforce participation is negotiated.  

The Australian Government also committed to strengthen existing reporting standards, requiring employers with 500 or more employees to commit to measurable targets to improve gender equality in their workplaces.  

Innovation and technology can improve productivity and help to attract and retain men and women to work in the exciting industry that construction is and should be. 

For more than a decade, the Australian construction industry has failed to keep pace with the global transformation of the sector, which is seeing a shift from a focus on manual work on site, to Modern Methods of Construction – that is, digitally enabled, pre-fabricated production processes delivered off-site by a diverse and globally connected workforce.  

Australia’s delivery of construction projects has long relied on bespoke solutions, or traditional construction methods, where unique designs, components and workers are brought to site and everyone starts from scratch.  

It’s costly. It’s labour-intensive. It fragments and silos the supply chain. It limits the repeatability of production processes or the re-use products that could easily be integrated into different projects.  

It’s a missed opportunity to make construction easier!  

The perception, or should I say misconception, that ‘off the shelf’ solutions are of lesser quality, has held the industry back from adopting Modern Methods of Construction that would completely change the game.  

Modern Methods of Construction improve productivity and procurement – infrastructure owners could choose their designs with the click of a button on a website and providers could have the certainty of long-term contracts supplying pre-fabricated repeatable modules that are made offsite.  

Using consistent, repeatable building components creates economies of scale that will continue to drive down costs and foster innovation, not to mention the reduced greenhouse gas emissions. 

School Infrastructure NSW is a great case study on how this can work.  

The organisation undertook a review of its $1.8 billion pipeline of new and upgraded schools, identifying opportunities to standardise its design and delivery approach.  

The goal was to build more quality schools in less time and with minimal impact on the environment, local community and school operations.  

In 2020, School Infrastructure NSW completed their first school using Modern Methods of Construction, the Jordan Springs Public School in Sydney’s west.  

Up to 95 per cent of the school was built off-site.  

Not only was it quicker and cheaper to build, it reduced CO2 emissions, material and water use and required less trades on site, reducing noise, dust, traffic and disruption. 

It also facilitated new jobs, training and upskilling and a safer working environment.  

As a result, School Infrastructure NSW has now nominated 20 candidate projects for this style of delivery. 

A switch to manufacturing and off-site prefabrication is one way we can ease the physical burden for our construction workers. 

It can also address the long hours our construction workers face, driving a better work/life balance.  

That not only makes the sector more appealing to women, but it can also improve the safety of our workforce, reducing hazards through more controlled and effective working environments where the likelihood of human error is reduced. 

There’s also a fantastic opportunity here to create jobs in communities that desperately need them.  

Infrastructure has tended to create opportunities in dense urban areas where employment is higher and where workers travelling to and from site further adds to congestion. 

The beauty of moving construction off-site means we can create new jobs in areas that really need them, such as regional communities, by developing manufacturing hubs for pre-fabrication of construction materials. 

Another innovation Infrastructure Australia has been advocating for is the widespread adoption of digital twins.  

Digital twins enable the rehearsal of all aspects of construction, identifying hazards, or better ways of doing things, as well as reducing risks, not to mention costs.  

Projects can be simulated and optimised digitally, ironing out issues before a single brick is laid.  

Without digital twins, diagnosing and fixing things that go wrong is just harder. And that’s unproductive.  

There are some great examples of digital twins being used on mega projects across Australia and some ambitious initiatives that are in progress, particularly in NSW, Victoria and Queensland.  

But while their use is spreading, digital twins are not standard.  

What we’re advocating is that digital twins are rolled out across all infrastructure projects, opening up opportunities to create networks of connected digital twins. 

By building ecosystems of digital twins that can talk to each other, we can better understand how different projects and assets can operate as a whole, optimising along the way. 

For digital twins to be linked effectively, they need to be underpinned by a common information framework.  

What we’ve heard from our stakeholders is that infrastructure capability is varied across the country, especially in remote areas where digital connectivity is limited. 

The implementation of a national information framework would drive better data sharing, enabling more informed decision making in the delivery of projects. 

We need to go back to basics, focusing on shared definitions, processes and classifications to ensure the information we collect is bigger than the sum of its parts. 

There are already similar frameworks that support this sharing of information across a project’s lifecycle at a local government level, and IPWEA’s National State of the Assets report is a great demonstration on how this data can be used to inform good decision making. 

We also have huge untapped opportunity when it comes to harnessing data and technology to maximise the use of recycled materials in construction – an opportunity to not only improve sustainability in the sector but to also relieve current resource constraints. 

Supply side risks have surged globally in the last few years, with many made visible and exacerbated by the COVID-19 pandemic and then compounded by the war in Ukraine. 

The cost of construction materials has risen by an average 24% in the last 12 months.   

If you are running a billion-dollar project – that is an increase that is really going to be felt. 

Currently, around 27% of conventional materials used for road projects could be replaced with a range of recycled materials.  

This would mean substituting around 54 million tonnes of conventional materials used in roads infrastructure with roughly 52 million tonnes of recycled materials.  

With advancements in technology and updates to standards, the tonnage of conventional materials replaced could rise to 43%, replacing 87 million tonnes of conventional materials with 80 million tonnes of recycled products. 

To achieve this, we need to look at embedding circular economy principles and practices into regulations, specifications and standards. 

This will provide clarity and confidence to the market and allow it to do what it does best.  

We also need to look at the successful projects already utilising recycled materials – and there are many – gathering the data and using these learnings as we move forward. 

The challenges we are facing in our industry are unprecedented. They are complex and far-reaching. And they are issues I am sure many of you are dealing with on a daily basis. 

No project is insulated, and no jurisdiction is immune. 

But the opportunities are even greater – every single day, technology is evolving and so is our ability to gather large amounts of data, interpret it and transform it into powerful and useful assets. 

Let’s take this opportunity now to work together and drive real change to set the industry up for a healthier future.   


Thank you.