CARTER, Mr Rowan, Director, Policy and Advocacy, Civil Contractors Federation COLEMAN, Mr Luke, Chief Executive Officer, Australian Telecommunications Alliance [by video link] COUGHLAN, Mr Christopher (Chris), Head, Spectrum and Network Infrastructure, Australian Telecommunications Alliance [by video link] PROUD, Mr Nicholas, Chief Executive Officer, Civil Contractors Federation [by video link] RICHARDS, Mrs Katherine, Chief Engineer, Engineers Australia Committee met at 09 : 02 ACTING CHAIR ( Senator Darmanin ): I declare open this hearing of the Senate Select Committee on Productivity in Australia. I begin by acknowledging the traditional owners of the land on which we are all gathering and pay my respects to their elders past and present. I extend that respect to any Aboriginal and Torres Strait Islander peoples participating today. These are public proceedings being videostreamed live via the parliament's website, and a Hansard transcript is being made. I remind all witnesses that, in giving evidence to the committee, they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee, and such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence. Witnesses also have a right to request to be heard in camera. If a witness objects to answering a question, they should state the ground upon which the objection is made, and the committee will determine whether it will insist on an answer, having regard to the ground which is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera. I remind senators of their obligations under the Behaviour Code for Australian Parliamentarians to treat witnesses with dignity, courtesy, fairness and respect. I now welcome representatives of the Australian Telecommunications Alliance, the Civil Contractors Federation and Engineers Australia. I understand that information on parliamentary privilege and the protection of witnesses giving evidence to Senate committees has been provided to you. Do each of you have an opening statement that you would briefly like to make? Mrs Richards : Yes, I do. ACTING CHAIR: Go ahead. Mrs Richards : Thank you for the opportunity to appear today on behalf of Engineers Australia and Engineers Australia's more than 140,000 members. Engineers Australia is the national peak body for the engineering profession. There are approximately 535,000 engineers in Australia. For more than a century, we have worked to advance the science and practice of engineering for the benefit of the Australian community. Our members work across every part of the economy in infrastructure, energy, resources, agriculture, manufacturing, transport and defence, to name a few. The committee has heard a great deal about labour shortages, housing costs and regulatory burden. Often these are symptoms of a deeper issue. Australia operates as one economy, but many of our regulatory systems still operate as eight separate systems. Though we will continue to exist in a federation, reducing unnecessary fragmentation may be one of the most practical productivity reforms available. Engineering capability is a productivity issue, and national registration for engineers should be seen as a practical, high-impact reform to lift productivity, increase labour mobility, reduce friction and red tape and strengthen public confidence. Engineering work is not neatly contained within state borders. Engineers move across jurisdictions, firms operate nationally and projects are delivered by distributed teams. Design can happen in one jurisdiction, verification in another and construction in a third, yet the registration framework has not kept pace with this reality. A national scheme would deliver three core benefits by improving productivity, by reducing duplication and red tape, by strengthening public safety and accountability and by supporting a mobile national labour market. If an engineer is qualified and competent, the system should make it easier, not harder, for them to contribute where demand is greatest. If Australia is serious about lifting productivity, it must be serious about removing structural barriers that prevent skilled professionals from working efficiently across our national economy. A national registration scheme for engineers is practical and long overdue. Thank you so much, and I welcome your questions. Mr Proud : CCF has an opening statement. ACTING CHAIR: Go for it. Mr Proud : Thank you for the opportunity to appear today. Civil Contractors Federation National represents 1,150 contractors located in every state and territory across the country. Our members build the roads, highways, subdivisions, sewerage, bridges, water infrastructure and utilities that enable housing, freight, energy and regional growth. Our central point is simple: Australia will not lift infrastructure productivity by treating construction as one uniform sector or by asking people on site to work harder within poorly designed systems. First measured must be the precise numbers that we have. We are short on data and detail in this industry. Construction is lumped in together. When we consider it and break it down in the short form of data that we have, which is—the shortcomings will be made evident in our representations. The Productivity Commission estimates that between 1994-95 and 2023, labour productivity in heavy and civil engineering construction rose by 44 per cent. That compares with 13 per cent across aggregate construction and a 13 per cent fall in building construction. This does not mean that civil construction has no challenges; it shows why broad diagnosis can produce the wrong remedy. Second, costs and delays are often locked in before construction through project selection, incomplete design, approvals, utility locations, packaging and risk allocation. We need consistent project-level measures, including budgets against actual costs, plans against actual time, rework, indirect labour, subcontracting intensity and the procurement model used. Third, procurement is productivity policy, and, too often, the current system does not work. Infrastructure Australia estimates that subcontractors deliver 41 per cent of infrastructure construction, with more than a hundred billion dollars of the five-year public pipeline to be developed beyond the principal contractor, yet procurement can still default to the largest package, lowest upfront price and most aggressive risk transfer. That reduces competition, adds interfaces, constrains capable mid-tier contractors and deters innovation. The consequences, particularly for the midtiers, is very real. One of our major contractors was identified as the preferred tenderer for a project almost 12 months ago, yet construction has still not commenced. Delays of this kind leave contractors carrying costs, plant and workforce capacity sitting idle and leave communities waiting longer for promised infrastructure. This is clearly a productivity failure. We also should consider the industrial relations framework, which also has a significant impact on productivity. The corruption, coercion and waste exposed across parts of the construction industry pose real costs to governments, taxpayers, contractors and workers. CCF supports strong workplace standards, but those standards must also promote lawful, cooperative and productive workplaces. We want to work constructively with the Australian government through the National Construction Industry Forum to improve industry culture and performance and ensure reform delivers better outcomes across the entire construction supply chain. CCF asks the committee to recommend six practical actions: a national infrastructure productivity measurement framework, a stronger measurement role for Infrastructure Australia and the Productivity Commission, trials that benchmark debundled procurement, civil productivity demonstration projects, a national review of infrastructure red tape and a program to accelerate the adoption of proven civil construction technology. This is not a call to weaken safety, environmental quality or workplace standards; it's a call to identify duplication, uncertainty and poor coordination, to allocate risk to the party best able to manage it and to measure performance across the client-contractor chain. My final comment is that, with a $242 billion major public infrastructure pipeline and with infrastructure workforce shortages projected to exceed 300,000 by 2027, productivity is not optional. Civil construction enables housing, energy, freight, communities and better procurement and workplace relations, and measurement will determine how much Australia can really deliver. Mr Coleman : Thanks for the opportunity to appear today. The Australian Telecommunications Alliance recently merged with the Australian Mobile Telecommunications Association—both organisations had put forward submissions to the inquiry—so we now represent the entire telecommunications industry. Our message to the committee today is straightforward: if the Australian government wants to improve productivity, the deployment of digital infrastructure must be a national reform priority. We have to make it easier to build the infrastructure that enables artificial intelligence, or AI. Productivity growth across every major industry will be improved by access to fast and reliable connectivity. Mining, agriculture, manufacturing, health care, education, financial services, even government services—all of them rely on fast, resilient and reliable telecommunications networks. Over the past decade, the telecommunications sector has contributed almost 15 per cent of Australia's economy-wide multifactor productivity growth. But, despite that positive track record, three structural barriers are limiting the sector's capacity to further improve productivity across the economy: first, access to key inputs, particularly spectrum; second, excessive regulatory cost and complexity; and, third, multijurisdictional deployment roadblocks. We need to stop diverting millions into unnecessary regulatory costs and turn that investment into critical digital infrastructure. Mobile towers are one example. They can be built in a matter of weeks, but the council assessments and approval processes, on average, take 211 days. In some cases, a new mobile tower can take almost two years to get the approvals required to build. This is happening in communities that are crying out for better connectivity. So the Australian Telecommunications Alliance is calling on the committee to recognise the telecom sector as a priority for national productivity reform, and to recommend the development of a comprehensive digital infrastructure strategy encompassing regulatory reform, streamlined deployment frameworks and a pro-investment spectrum policy. Now I'd like to hand over for a moment to Chris Coughlan, our head of spectrum and network infrastructure. He'll outline the findings of AMTA's future of mobile report and explain how targeted reforms could unlock billions in additional investment. Mr Coughlan : Earlier this year, AMTA commissioned Deloitte Access Economics to produce a report: Future of mobile: modernising Australia’s telecommunications framework. Deloitte found that small reforms would produce disproportionately large economic gains, especially in growth and regional areas. A 10 per cent improvement in regulatory practices could unlock around $430 million, which could then be channelled into additional telecommunications investment annually. A 25 per cent reduction in approval timeframes would allow industry to deliver 150 to 200 accelerated mobile sites every year, bringing improved connectivity to up to 250,000 Australians sooner. And a 10 per cent reduction in regulatory complexity with nationally consistent planning practices would deliver around $150 million in annual productivity gains. The report identified three short-term opportunities: firstly, establishing a national digital infrastructure coordinator-general to support streamlined governance to accelerate significant deployments; secondly, create a harmonised planning framework with incentives for adoption by local councils; third, amend schedule 3 of the Telecommunications Act to adopt a risk based approach to fast-track low-impact builds. We were very pleased to see the commitment to amending schedule 3 in the federal budget and are looking forward to engaging with the department to ensure the reforms are effective. The report also identified three longer term opportunities: firstly, developing a national spectrum strategy to provide investment certainty, drive efficient allocation and secure Australia's 6G future; secondly, creating targeted planning and land access relief for government co-funded sites; and thirdly, implementing an industry led process for streamlining the Telecommunications Act over time so it can be flexible in managing the rapidly changing sector. Implementing these reforms will be significant for regional Australia, where some councils take years to approve mobile tower developments. We ask the committee to recommend fast adoption of these reforms that will improve the productivity of every sector that relies on mobile connectivity. Lastly, we've also commissioned another report from Deloitte Access Economics that considers the importance of mobile in the AI age. This week, Deloitte completed a round of consumer research that would inform their findings. For example, their research found that almost two in three Australians already use AI-powered mobile tools and, among this two-thirds, 59 per cent said it made them more productive, saving 1¾ hours per week on average. The report will be published in about a month's time. We are happy to answer any questions. ACTING CHAIR: Senator McKenzie. Senator McKENZIE: Thank you, everyone, for your attendance. Engineers Australia, it's fantastic to have you here. There has been a bit of debate with our evidence yesterday, as you might have followed. Every second Uber driver I have seems to have an engineering degree and I'm wondering why they're driving Ubers and not actually filling this skill shortage gap, so I would appreciate you talking me through that, as one of the first Senate inquiries I did was into the shortage of engineers and that was a long time ago. Mrs Richards : Certainly. When it comes to our migrant engineer workforce, I think the starting point is engineering is probably the most diverse professional workforce in this country. Well over 60 per cent of engineers are born overseas. Yet, when it comes to the migrant engineer experience, we know what holds them back from getting the roles in industry and fulfilling those critical failures—I should say 'critical gaps'—in all of our major areas, from aerospace engineering and marine engineering to mining, resources and manufacturing. All of the disciplines—there are about 14 major disciplines—have significant shortages reported. Senator McKENZIE: What are those barriers? Mrs Richards : First, their local experience. Eighty-five— Senator McKENZIE: I just know we've got limited time and I've got pages of questions, but how can we— Mrs Richards : The first is local experience. Employers value local experience— Senator McKENZIE: So how do we get people—people like Nick's members, people like Luke's members in the telecommunications sector and other witnesses we'll have before us today—ready to give these young graduates a go? Mrs Richards : To give the migrant engineers a go, I think the first one is creating incentives in industry to employ the migrant engineers. Because we have such a patchwork of regulation and because engineers serve the community, employers see them as high risk because they don't have the knowledge of the local standards, of the local legislation or, indeed, of community expectations. So really strengthening— Senator McKENZIE: But these young engineers that are international students have graduated from Australian universities. Mrs Richards : In some cases, yes. In other cases, they are engineers who have come in under skilled migration already qualified. One of the challenges is that many industries don't want to employ engineers who are not citizens or who don't have permanent residency. We know that that is a barrier. Senator McKENZIE: What's the purpose of a skilled migration scheme bringing in engineers that no-one wants to employ? Mrs Richards : Importantly, they do find roles, often in engineering. It takes a lot longer to get into those roles, because they more or less have to prove themselves in the Australian employment market. Then, typically, they find themselves working in areas adjacent to professional practice. Then, once they've built up that body of local experience, they are able to apply for those engineering roles in their discipline and area of expertise. It is a long lead time to realise the benefit of a migrant engineer. The other things that often hold back our migrant engineers are networks. We work much like other professions. How do you know you've got a good engineer? Another engineer tells you. So, when migrant engineers come into this country, not having those established networks really does put them at a disadvantage. Finally, it's communication skills. Senator McKENZIE: So having a higher English standard would help. Mrs Richards : A high English standard, yes. But, of course, it's more than— Senator McKENZIE: I'm just wondering what Engineers Australia's role is as the professional body. Is it to create those networks and links? Mrs Richards : Absolutely. Senator McKENZIE: When you say 'incentives for industry', to me as a former minister that screams, 'I need to find money—taxpayers' money—to help industry hire engineers.' Is that what you're suggesting? Mrs Richards : I think that is one potential pathway here. Senator McKENZIE: What's another? Mrs Richards : Another potential pathway is when our engineers are offered cadetships right through university. That's an earn-and-learn model. We know that those are incredibly powerful at generating talent within our engineering cohort as undergraduates, and then they move into sectors. The important thing for business is that they invariably get billable hours by the end of the second year of an undergraduate. So that's a win-win, but it's still a cost on the balance sheet of business to run cadetships. Equally, internships, which is where engineers spend about 12 weeks in their four-year degree working with industry, are not funded right now. So there's a real cost to the student and there's a real cost to business. But that's low-hanging fruit to get after internships and cadetships to secure the future engineering workforce. Senator McKENZIE: Excellent. We'll follow up with some of our other witnesses on their preparedness to do that. You said there are 535,000 engineers in Australia. Are they all working in engineering? Mrs Richards : No, Senator. You will find that our engineering workforce, according to the Australian Bureau of Statistics, is probably around 440,000. Those who are actually practising as professional engineers—purely in the technical domain—are about a quarter of a million. Senator McKENZIE: That's outrageous. That's half! Mrs Richards : But we have to remember that the engineering mindset is valued in all areas adjacent to engineering, be that in operational delivery, project management or research and design. You see engineers bleeding out into every sector of the economy, and that's actually for the benefit of the economy. It's not a detriment. Senator McKENZIE: I hear from construction. I hear from departments who have lost engineering capability, which impacts their ability to assess tenders— Mrs Richards : Yes. Senator McKENZIE: and give ministers good procurement advice, because that technical expertise is no longer in federal departments or state departments. That has a significant impact on cost of infrastructure projects. Tell me if I'm wrong. Mrs Richards : No, Senator, you are correct, and that's why Engineers Australia has long advocated for chief engineers, to ensure that that technical advice is given to government—is given to the bureaucracy that may not have had technical training—to understand and characterise risk, to understand and characterise the feasibility of projects and to actually be the bridge between industry, where we find 85 per cent of engineers, and the public sector, where we often see the investment pool. Senator McKENZIE: You strongly support a nationally consistent engineering registration. I know engineers who have to decide whether they're going to pay up to 1,000 bucks for the professional membership and then the state-based membership. How much productivity is currently lost because engineers must navigate multiple state registration systems? Mrs Richards : We know that it's in the hundreds of thousands—and millions—of dollars when you look at it across all industries. Typically, for large firms, the cost ranges from around $100,000 to $500,000 annually. I must say that these fees, which are paid in order to ensure engineers are registered in multiple jurisdictions, actually give no real benefit to underlying public safety. So, right now, we have a national engineering workforce yet we are still managing that workforce based on postcode. At best, that system is antiquated. At worst, it is an absolute draw on—it is negative on—the productivity of this nation. Senator McKENZIE: You support a smarter NCC that cuts red tape and lifts productivity. And if I hear that phrase one more time in the heap of submissions that I've read and witnesses I've seen—the whole purpose of this inquiry is to actually get the dot points under that sentence. Can you give me your top three actual things we could recommend to lift productivity in your space, whether it comes to the NCC or otherwise? I'm happy for you to give me more detail on notice. Mrs Richards : Absolutely. Senator McKENZIE: And that's a cue to Nick and the telcos; I'll be asking you the same on that. Mrs Richards : Okay. The first thing is that we need to remember that, in relation to the NCC, it is important to have a nationally consistent framework. So let's keep going with a nationally consistent framework. We can't go back to deep levels of fragmentation— Senator McKENZIE: Yes, but it was something like three pages, and now it's three folders. Mrs Richards : Right. So there are things that we need to do. There needs to be a recommitment to national harmonisation. We have jurisdictional variations, and that's what has to stop. Senator McKENZIE: What specifically? Mrs Richards : Where state and territory variations are then put on top of the National Construction Code. Senator McKENZIE: Give me an actual example. I'm happy for you to take it on notice. Mrs Richards : I will take that one on notice. But we do know that, for business and practitioners who operate nationally, when they go to do the same work but in different territories there are different requirements. Senator McKENZIE: Correct. Mrs Richards : That's the first one. Senator McKENZIE: I hear all that. I actually want legit examples. I'm happy for you to take it on notice because I have other questions for other witnesses. Yesterday, we heard from Geoffrey Watson and the Master Builders that there are significant cost escalations across major infrastructure projects, especially in Queensland and Victoria where there are significant systemic issues with organised crime in the CFMEU. Yet Infrastructure Australia analysis shows a minus 20 per cent productivity decline in the past decade. From an engineering perspective, what are the biggest contributors to the cost overruns that we're seeing in public infrastructure projects? Mrs Richards : Senator, there's no simple answer to that one. Senator McKENZIE: That's why you're an expert and you're in front of a Senate inquiry. Mrs Richards : Absolutely. Senator McKENZIE: What are the reasons for the cost overruns from an engineering perspective? Mrs Richards : They are poor characterisation of initial design—that is, the lack of knowledge being applied to the design at the outset. When I say that, whilst it gets characterised, it's how people understand how to frame those risks in a way which is consistent with cost and schedule. It is— Senator McKENZIE: That's the reason for the cost overruns? Mrs Richards : In part, from an engineering perspective, particularly when we have an absence of technical advice in the public service. Strengthening the technical advice in the public service would go a long way here. When people aren't confident then, invariably, they can default to practice to processes and procedures— Senator McKENZIE: We've seen cost overruns that are of obscene amounts—in Victoria in particular and also in Queensland—that have been very well documented. From an engineering perspective, the design, the lack of expertise in the department is the reason for that, or one of the main reasons? Mrs Richards : One of the main reasons can be a failure to accurately characterise the risk of major projects. Senator McKENZIE: Your submission advocates for modern methods of construction. I've seen some great examples of this. What regulatory barriers and cultural barriers prevent wider adoption? Mrs Richards : When it comes to regulatory barriers more broadly, it's about the costs of establishing the factories to build the houses. Culturally, we are still used to seeing people building a house onsite with the teams there, as opposed to the house being built offsite and then assembled. But of course, there are profound benefits to building offsite, particularly when it comes to dealing with rework, when it comes to controlling the dimensions of a project, and when it comes to actually fitting the project out. We can get amazing benefits through that system, but it is highly expensive to create those factories in the first place. Senator McKENZIE: One of the barriers to increasing productivity in the infrastructure space is new products and new processes and innovation. We've always built roads like this. We've always built railways like this. I've seen some amazing new products and new processes here and internationally from an R&D perspective. On notice, I'd like you to be quite specific, not general, about your commentary on that. I'd also like to understand the role of AI adoption for engineers. I want to go to the civil contractors now. Yesterday we heard from the Master Builders, who discussed the costs of BPIC on construction in Queensland. It actually inflated the cost of construction in that state by 30 per cent. Can you explain how BPIC costs and delays impacted the delivery of construction projects by your members, Mr Proud? Mr Proud : We've had an inquiry—I'm in Queensland today and I'm meeting with government and discussing this very subject. We've seen a period in this state in particular whereby poor conduct, coercion and inefficient industry practices increased project costs. We've seen projects delayed and we've seen taxpayers left short-handed in terms of the costs. We've seen contractors and workers carrying the consequences. There has been visual footage of CFMEU carrying out practices of intimidation, standing at a gate and making life hell for people going through those gates. We want to see that stop not only for the human-impact factor and wellbeing; we know that this makes it harder for people to go to work—to just do their job. That's what we want them to do: do their job. In Queensland, we've seen BPIC ruled out by the government here. We were speaking with the Deputy Premier yesterday. We very much support its abolition, and we don't want to see it coming back anywhere in Australia. We don't want to see it employed nationally. We've seen it ruled out. We want to see measures that further rule out that BPIC measure because it's created a toll. Luckily, this state is doing very well. It's got the Olympics to focus on, and we're having the conversations and moving forward. That's what that inquiry is doing in this part of the world. It's creating the structure to get a major international platform for sports for the greatest competition on the planet to come to this city. We expect that what's happening in this place to reform will create better outcomes for productivity. We know, as per the inquiry here and what we'll uncover, no doubt, in Victoria—as that's now been announced—the inefficiencies and the impacts we see that it has on this industry, particularly the mid-tiers and the lower tiers, and the issues that also undermine fair competition and make it harder for reputable businesses to invest, employ and grow. We need to turn that around. Senator McKENZIE: As you mentioned, the federal government has recently introduced legislation to allow the federal government to discriminate in favour of businesses that have union EBAs, when awarding contracts or grants. Yesterday we asked integrity expert Geoffrey Watson whether, given the experience of the Big Build in Victoria, there is a risk these union preference laws could give rise to further corrupt practices. As a man that supports the trade union movement, he was unequivocal in saying, yes, the federal government's laws will give rise to those practices. I understand that, in implementing these laws, Minister Rishworth is consulting with your organisation, as part of the construction industry forum, to consider the standards for the construction sector. Have you or your members been placed under any restrictions by the government in terms of discussing those standards publicly? Mr Proud : The standards are part of the program of work for the National Construction Industry Forum. This is a long lead of work that has needed to happen for decades, and arguably it's heading in the direction to be able to start to turn around the challenges we've had in the industry, particularly the bullying, the intimidation and the issues that we have seen that have caused great damage to many people's wellbeing and to the businesses that are just trying to get Australian communities built. We see that the government's record here is that they have placed the CFMEU into administration. We see that's going to run for five years, and over that period of time there is an opportunity for reform. We need to make sure that that period is well used and to ensure that there is a new pathway forward for our industry to be constructive and for this inquiry to try and bring about the productivity measures and policy that we're looking to have implemented. As for the legislation you referred to, we've had discussions with the government. We've raised our concerns. We know that BPIC is built around a similar sort of positioning and favouring one union agreement as opposed to a non-union agreement. In Victoria we'll see more about that. What we don't want to see in the future is freedom of association challenged by third parties. Effectively, we want to see that there is an opportunity to have the government absolutely leverage its powers to create great projects and make sure we have a better industry. But we've had assurances, as I say, that this legislation wouldn't be called into play for construction or infrastructure projects. We want to see more detail on that. Senator McKENZIE: So you're waiting for more detail from the government that construction has been ruled out of the— Mr Proud : We have been told that that's the case, and it's in writing—the statements around what's happening with that legislation. It's been passed through quite clearly to us verbally from the minister that this is not intended to do anything of that nature, but industry still has its concerns because we've just lived that experience here in Queensland. Senator McKENZIE: Absolutely. Have you seen a draft of the standards to be used for construction? Mr Proud : No. Senator McKENZIE: When do you expect to see those? Mr Proud : There's a consultation process on what standards could be. I assume that that will kick off and that will be imminent. We'll then see some standards that will be built out of that. I'm of the understanding that that will be built on the feedback that's received from that consultation process, which will be very far and wide and reaching. Senator McKENZIE: And nobody that's a part of the construction roundtable has been asked to sign an NDA? Mr Proud : Not that I know of, no. Not for the question you've asked, no, absolutely not. Senator McKENZIE: Yesterday we heard evidence around tier 1s. Some evidence was that tier 1s were aware that subcontractors had had arrangements with the CFMEU that saw corrupt practices. Other evidence was that the tier 1s had no idea, nor could they know. As the shadow minister for infrastructure, I'm interested in how, at a Commonwealth level, we can structure funding agreements for public infrastructure that explicitly rule out and avoid the types of issues we've seen systemically in Victoria with the Big Build. Is there a way—a procurement or tendering process, the national funding agreements, the partnership agreements between state and federal governments—where we can have a much more explicit arrangement about the expectation of spend from the Commonwealth taxpayer that lessens the potential for it to be siphoned off to the CFMEU and criminal elements? Mr Proud : I think a lot of the feedback from the inquiry in Queensland and the inquiry that's about to be undertaken in Victoria will certainly provide a significant amount of detail about the practices that have been allowed to happen. I guess that's the starting point, to look at what is actually evidence and what has been considered by the police and the AFP and the multiple agencies that have been working to support the evidence that's being provided and to look to try and prosecute around those allegations. And so making— Senator McKENZIE: But, outside of the criminality piece, I'm talking about the funding element, the lever that a Commonwealth minister would have—I'm the shadow minister; I therefore hope to be the actual minister one day—that can be implemented to give that surety to the Commonwealth taxpayer. Do we need to change the contractual relationships? If you haven't thought about that, I'm really happy for you to take that on notice and give me your thoughtful— Mr Proud : No, we have. I'll defer to Rowan Carter in the room a little bit about the contractual— Mr Carter : I can talk to that point. Senator McKENZIE: Thank you. Mr Carter : There are two elements to your question. Obviously, we've touched on the criminality area. That's immaterial in a Commonwealth funding agreement because those practices, whether it's corruption, coercion et cetera, are already illegal. When it comes to the productivity lens and aspects of project delivery that are antiproductive, then yes, absolutely. The CCF is of the view that there could be some pro-productivity clauses in the Commonwealth funding agreement— Senator McKENZIE: Such as? Mr Carter : It's hard to be very specific, because it's hard to define what those antiproductive clauses are. But one of the things that we would talk about is respecting the EBA process and not putting additional measures into project delivery or procurement that add on top of that EA process, like where the Commonwealth goes, 'If we're going to be funding this project, it needs to be about the quality of the project, and it needs to be about ensuring that we get taxpayers value for money and that state procurement agencies—it doesn't matter if that's a transport agency or a water utility, whatever the case may be—ensure that they are focused on value for money.' You would need to keep those clauses quite high level, because what could be defined as an antiproductive clause could be quite flexible, for example. Senator McKENZIE: One of the pieces of evidence from Mr Watson yesterday was on when you have a very small number of players in that system. He gave evidence yesterday that there was a bureaucrat in Victoria and two tenders, one from the CFMEU and one not. The one not was a lot cheaper; they chose the other one. When you look at what your members do out in the civil contracting space, that's not government funded and it's on time, on budget and done for much less cost. Yet, when it comes to a publicly funded program, we have a lot of problems. Is there something more specific that you could suggest? How can the construction industry deliver so well in the private sector, yet we have this real challenge when the taxpayer is funding it? Mr Carter : I think Nicholas touched on this in his opening remarks. Governments as clients are very risk averse. As has been touched on by Engineers Australia, there is a loss of capacity in project management from clients. That leads to circumstances where you'll get projects that sit there for 12 to 18 months before commencement just because we've outsourced project delivery to a handful of larger contractors. One of the things that I would be supportive of, for Engineers Australia but not just in the engineering space, is building that capacity for states to manage projects themselves and therefore be directly responsible, rather than outsourcing those costs to tier 1s. Right now, we do see in some of those significant projects that government doesn't have the capacity to project manage them and outsources that, and then you eventually see significant cost overruns, somewhere in the realm of 30 per cent, for those significant projects. We've said that government as a whole, as a client, needs to take on that risk and essentially look at different procurement models et cetera. We don't have that data. I think, as Nick has touched on as well, government needs to begin trialling in this space. These project overruns can be baked in at the beginning of the project if we've used the wrong procurement model—if we've gone with, for example, a design-and-construct contract to a large contractor rather than actively managing that project, breaking it up and providing that work to smaller contractors. It adds some competition into that space, and some of those smaller firms may be more efficient at delivering specific aspects of individual projects. They may not have the scale to, for example, deliver a whole bridge, but pilings, for example, or access roads— Senator McKENZIE: That's right—culverts. Mr Carter : Exactly. They may be more efficient on those small projects. Senator McKENZIE: The things I didn't know! Mr Carter : We are saying that government should be piloting those alternative models of procurement so that we can begin to collect that data. It also touches back on, again, the allocation of risk in a project. If you've got a significant number of contracts with a small number of contractors and there is a delay, problem or dispute, you have to pay the fee of breaking that contract. Whereas, if that's broken up and government is proactively managing that project and you've got a poor performer on a project for any number of reasons, you're able to essentially replace that part of the project with someone else for a much smaller cost. We would like to see that trialled particularly, and it has to be broad. It's got to be trialled in a regional area; it's got to be trialled in metro areas. That is one of the things that we're asking for as a recommendation. We would like to demonstrate that our smaller contractors can be more productive than the large ones. Senator McKENZIE: We actually did that. We had big tier 1s in defence procurement projects. We've got a lot of bases out in the regions. We wondered why the local dry cleaner couldn't dry clean. There are myriad services being provided locally. We were able to do that because—it's true—the big tier 1s are all multinationals. They get paid a lot of money to hold the risk on behalf of the government and taxpayer, and they pass that all down the supply chain, with its inherent risks. It's all a little too cosy. Is this done well anywhere in the world? Mr Carter : We could take some specifics on notice— Senator McKENZIE: Yes, if you could— Mr Carter : Definitely—and come back to you. Senator McKENZIE: And in industries other than construction. Mr Carter : Certainly. Senator McKENZIE: As I said, we did a Senate inquiry, back in 2017, into Defence. Former senator Gallacher, now no longer with us, was the chair of that. It made some recommendation that the government at the time implemented. I'd be interested to know if, outside of construction, those procurement models are different anywhere else in industries here domestically, but if there is a better way globally I'd really appreciate some advice. ACTING CHAIR: Do you have more questions? Senator McKENZIE: I could go all day, so I'm happy to share the call. ACTING CHAIR: I'll jump in for a couple, then you can take the last couple if there's time. Engineers Australia, you talked about the occupational licensing work and the need for alignment of the registration system. Do you think that the National Productivity Fund is the right vehicle to progress this work? I understand there's money allocated there to do that work. Is that the right place? Mrs Richards : I think it is, probably. More importantly, I think, we want to work such that we get a co-regulatory system created where we build off the back of the existing regulation system that is there, reduce the fragmentation and then get to the point where you register once and you practice anywhere, just like a driver's licence. We want to get there. ACTING CHAIR: You propose a national target of 60,000 additional engineering graduates by 2035. Mrs Richards : Yes. ACTING CHAIR: What would need to happen across universities, industries and government to reach that ambitious target? Mrs Richards : First, we need to prioritise maths and science in our schools. We have too great a variation in mathematics in schools, and that means that, right now, we only have about 8½ per cent of our year 12 kids doing advanced mathematics—calculus. That's important, because we've been talking about artificial intelligence ad nauseam, but the way in which artificial intelligence works is on the back of calculus. Making sure that the future workforce, regardless of whether or not they want to go into engineering, actually has a strong maths foundation is to the betterment of all Australians when we consider the technology that is coming down the track. Second, we need to ensure that, when it comes to our university sector, we don't simply raise the ATAR for engineers. In fact, we want to keep the ATAR as reasonable as possible such that kids who are competent in science and maths go into engineering, not just kids who are brilliant at maths and science, because engineering demands problem solving, it demands strong communication skills and it demands a focus on others and service. We know that when we do that and we keep the ATAR suppressed, if you like, in that classic 75 to 85 range, we can open the profession to many more students, and that's important. We have to fund our universities and continue to apply downward pressure on HECS fees for students doing engineering. We also need to fund their internships. Unlike other professional internships in, say, teaching and nursing, engineering internships, which are compulsory for their degree, are not funded. This is a detriment to the kids who are studying. When it then comes to graduating and moving into the workforce, when industry have incentives to run those cadetships which enable them to get kids into an earn and learn program in a tertiary institution, they get win-wins. They secure their future workforce, and, importantly, it gives the student a liveable earned wage and an amazing experience. You fast-track productivity for junior engineers when they are in an earn and learn program through university. Those are just some of the things that we can concentrate on now. They're low-hanging fruits, and they are really to the benefit of both industry and the graduate and student engineers. ACTING CHAIR: Just on workforce again, for the civil contractors, the Commonwealth skills package that was announced in December has prioritised civil trades and provided direct financial support for apprentices entering the civil infrastructure workforce. Can you give us a sense of whether that's made a difference to your members' ability to attract and retain staff. Is it too early? How is that going? Mr Proud : We've got a report, which we'll table. It's an environmental scan. It's embargoed, but we're happy to table it for this hearing today. ACTING CHAIR: Thank you. Mr Proud : It's fresh off the blocks. It does have a section at the back which talks about the shortages over five years. Jobs and Skills Australia analysis shows that, from civil engineers right through to plant operators, we've been in shortage for nearly every occupational category for five years. In December we were able to have cert III in plant operations and cert III in civil prioritised on the Australian Apprenticeships Priority List, which was fantastic. It lands us with a civil engineering technician outcome, which is a white-collar outcome. It means someone can be trained, but they have to go on plant, on a big yellow digger, and then they have to go and work in a site office. That doesn't make any sense, and everyone I'm talking to here in Queensland about getting this stadium done is saying that we need everyone here, as many people as we can. We're as short as we could be anywhere in the country. Having them go from plant operations, ready to move that earth and do the land development, to then go and work in a site office doesn't make any sense. We're thinking we just have them have that title of a civil engineering technician, but does that raise an industrial implication of a higher wage point? That's a challenge for us, so we haven't been able to see as many people do the cert III, or start that and get the incentives, to then start to work on site in the capacity that we need them. We think that that will hopefully change, and we're having discussions about that as late as yesterday. We're hopeful that we're going to see some remedy to that, to see that people are out there. These are skilled jobs. This is an apprenticeship that's requiring high tech in these cabs to millimetre precision on the cut. This is something that is skilled, and we need to make sure these people are trained, seen as the skilled categories that they are and then get them out there and get these jobs done. ACTING CHAIR: Thank you. Senator McKenzie, do you have any final questions that you want to ask before we let these witnesses go? Senator McKENZIE: Sorry, for the telco guys, we haven't actually— ACTING CHAIR: I've got a question for them. Senator McKENZIE: I'll put the rest of mine on notice, but, yes, I will have other questions. ACTING CHAIR: Okay, thank you. I appreciate that. I have just one final question from me to the Telecommunications Alliance. In your opening statement you talked about the time to secure development for telecoms infrastructure is around 211 days. I think you said that that was a council bottleneck specifically, but can you talk a bit more about that. What contributes to that bottleneck, and how long do you think the process should take ideally? Mr Coleman : You are right; 211 days is the average amount of time it takes to get through planning approvals to build a new mobile site in Australia. Across the country, we've got a patchwork of different approvals processes that are inconsistent. Building the tower itself can take less than a week. The construction of a new mobile tower is very quick, but, because of this patchwork of different planning and approvals processes, you don't know what you're going to get in any different jurisdiction. We've got more than 500 councils across Australia, each with their own different conditions. Even looking at mobile sites that have been funded by the Commonwealth government, under programs like the Mobile Black Spot Program, we have seen delays to more than 176 sites because they get caught in planning purgatory. One site was delayed by as long as 10 years because of planning approval processes. We've seen seven other sites that have been in planning since 2019 that were hung up by these approval processes. So really, if I can leave one message for the committee, it would be to strengthen the carry-out powers and immunities which we have in the Telecommunications Act so that we can slash through that red tape and build critical mobile infrastructure as quickly as possible without getting caught up in these bureaucratic delays. ACTING CHAIR: Thank you, and thanks for keeping it succinct. That concludes our time for questions. Senator McKenzie has indicated there will be some questions on notice. If you could provide those responses by 5 pm on 13 August, that would be appreciated. Thank you very much for your time..