Mike Hosking: Construction industry an embarrassment - good on the Government for stepping in

OPINION

The Government's move on the construction industry is spot on.

It's a sorry, sad old state of affairs they've had to do what they have, but the market has failed.

Almost 20 per cent of government procurement goes to construction so if you want to bid for work, part of the deal will be you have to train people.

Nowhere near the training needed goes on.

Those who do train, train and then get the talent poached. Companies who haven't trained, pitch for work by under-cutting those with higher costs through things like training.

It's a ropey, unsatisfactory, and amateurish way to operate.

The Government is also looking at cutting deals through programmes to encourage more people to train. Extensions of work for the dole and so on.

We need 30,000 in the industry now. We'll need 50,000 in a couple of years' time. And what's galling is this is all unfolding at a time when there has never been more work. Never has there been more growth, never been more demand.

This should be an industry that is on fire. It should be expanding, employing, training, and paying more. It should be an exemplar of an industry showing the rest of business what's possible when times are good.

Instead it's a mess. From Fletchers, the so-called blue chip operator, to Ebert in liquidation just this week, to the apartment complexes sitting idle while endless problems stall progress and shatter deadlines, to the subbies out of pocket. If you wanted a 101 on how to cock up an industry's reputation, you'd be looking pretty hard to find a better example than what we have in front of us right now.

This is an industry famous for what? Boom and bust. And worse this time, bust in the boom times.

For a person like myself, who in general terms argues the merits of a free market, this is an embarrassment.

Yes, governments sometimes can do things only governments can do.

Incentives on training programmes is a win-win. It gets people into jobs, it fills gaps, it reduces negative social indicators.

But what the Government is up to this week in construction, is more resurrection, it's more life support, it's more rap across the knuckles. It's a broad-based "get your act together" campaign.

And it is such a shame it's needed. Having spent the past couple of years along with so many other industries decrying the gaps and the opportunities, there seemed a real push in schools to turn kids onto the trades.

And once that trigger was pulled, what did they see? Chaos, locked gates, and receivers.

So this week the Government scores well for its approach to business. The R&D move is welcome, and the incentives for construction to wake their ideas up is vital, and not a moment too soon.