Last year Australian Constructors Association (ACA) published a report titled 'All Risk No Reward' that investigated construction's profitless boom. It found that: "The model of total risk transfer across the building sector has produced a deeply unstable industry - systematically week financials, a myopic focus on the short-term and an adversarial culture. A lawyers playground!" It noted that the construction industry has all the elements of a 'failed market' and that government is best placed to lead the way through increased use of collaborative procurement models focused on delivering best value not lowest cost. There is much debate about the degree to which governments should intervene in the operation of markets and construction is no exception. So we thought what better opportunity to bring this debate into the public realm than at the upcoming Foundations and Frontiers forum. We will be lining up two teams for an Oxford style great debate with the motion "The market should be left to itself without government intervention." Affirmative or negative? This will be one of many not to miss plenary sessions at the forum. Details of the FF24 agenda will be released shortly but don't delay if you want to secure tickets to this ground breaking event. https://lnkd.in/g-GG8zbz #ff24 #imaginewhen #timeforchange
Robert Tustin
5mo
Well done to Mr Jon Davies and Australian Constructors Association (ACA) for this report. Having reviewed some Australian contracts, I know the issue is particularly pressing there, but I've been pointing out similar matters to organisations in the UK such as Build UK and British Property Federation for some years although unlike ACA they show no interest whatsoever. Many of the BPF's members are law firms. A small idea here I had yesterday on trying to limit onerous amendments: https://www.linkedin.com/posts/rob-tustin-8177751b6_could-publishers-of-standard-forms-put-their-activity-7213164107473006592-oSSI?utm_source=share&utm_medium=member_desktop I've done a lot of work on these issues though, including detailed reports on simplifying approaches to delay claims and making dispute resolution less adversarial and less combative (problems compounded by the judiciary and respected academic institutions), which I've written to the UK government and former shadow government business policy teams on, and which I hope the Labour team might pick up on once in government. Done lots of other stuff too in terms of proposing an escape from the onerous amendments scourge, but nobody here is interested unfortunately.
Angela Hucker
6mo
Hopefully the teams don't have boxing gloves Jon Davies 🤣
Author / Senior Lecturer-Western Sydney University / Fellow AIB / Senior Lecturer-IATC
6moHi Jon - Hope this clarifies - See ABS data below. The construction industry's EBITDA is the same as that of manufacturing. As you know, construction organisations are project-based businesses, unlike manufacturers, which are continuously process-based. Contractors do not own the product at any time during the process; it is designed by others, quality is specified differently from project to project, cash flow is negative for the life of the project, and there is uncertain demand (over 100 recessions in work-type/region since 2000). Additionally, there are 4+ times more construction organisations than manufacturers (444,000 versus 90,000), even though the total sector income is approximately the same. See the table below.