This piece was originally published in the AFR. Click here to read.
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July 29, 2026
On Tuesday, the Electrical Trades Union asked the Fair Work Commission to authorise an unprecedented multi-employer agreement covering NSW and ACT electricians. The application names only 12 large Sydney contractors, but the mechanism before the commission can then extend to every contractor with more than 20 employees.
What was once opt-in now allows employers who never sat at the negotiating table to be dragged into one agreement. It lets the commission license, step by step; the pattern bargaining the law otherwise bans.
Multi-employer bargaining was touted back in 2022 by Labor’s Secure Jobs, Better Pay Act as protection for low-paid workers in aged care and childcare. But it might now be applied to one of the best-paid trades in the country. According to some estimates, it could roughly double the cost of electrical labour, which makes up about 7 per cent of total housing project costs.
That should stop us in our tracks because we are already losing the housing fight. We are on track to fall roughly 262,000 homes short of the National Housing Accord’s 2029 target and construction costs are a real factor.
In a cost-of-living crisis we all want to see wages rise. When output per hour is climbing, a union helps workers claim a fair share. But when output is falling, higher pay and shorter hours are not shared gains. They are costs, passed to households, the next worker in the queue, and taxpayers.
As Bob Hawke, Paul Keating and Bill Kelty understood, growing wages means striking a bargain between workers and employers to grow productivity, not drag it back.
“It should, at minimum, fully exclude construction workers from multi-employer bargaining.”
This is not an argument against unions. A union can be a healthy counterweight. Where a few large employers dominate and workers cannot easily move, a union can balance monopsony power, helping to set fair, competitive wages. But a union that sets the terms for an entire trade, across a whole state, is not the counterweight. It is the monopoly. We should be particularly wary of this sort of market power in the construction industry given the experiences with the CFMEU.
We need more competition and dynamism in construction, not less. Today Australia builds about half as many homes per hour worked as it did in 1995. Even adjusting for bigger, better houses, construction productivity has gone backwards by 12 per cent over three decades, while the rest of the economy has lifted by nearly half.
If we cannot turn construction productivity around, we will face real challenges around whether homes get built, if public transport networks are delivered on time, and if data centres and clean energy can be delivered. We will be poorer if we have to make difficult choices between these things. But you cannot fix supply with a sector that produces less each year.
Of course, industrial relations aren’t the only roadblock to lower costs and higher productivity – the Productivity Commission’s work highlights planning in particular. But few levers are completely in the Commonwealth’s control. One of those is migration. Just within the electrical profession, it’s estimated we need 32,000 more electricians by 2030 to build the homes and deliver the energy transition.
Yet in 2024, the Labor shut tradespeople, electricians included, out of its new fast-tracked specialised skills pathway, despite admitting the shortage and the sector’s requests. Right now around 1300 overseas-qualified sparkies are working below their trade, tangled in red tape. Labor to its credit is trying to address barriers for skills recognition across states and internationally – but it needs to grow the workforce too. Australians are nervous about migration levels but migrants who are building homes have much greater social licence.
Labor should say plainly what the goal is: more homes, built faster, for less – and then pull every lever it has control of. It should, at minimum, fully exclude construction workers from multi-employer bargaining, open the door wider to migrant tradies, and fix skills recognition to ease acute shortages.
Treasurer Jim Chalmers should also ask the Productivity Commission to examine how all its industrial relations changes affect productivity, so we can have an evidence-based conversation about trade-offs rather than an ideological one.
Australian living standards are going backwards. Labor has delivered many wins for the union movement, but it has failed to forge a bargain that grows productivity. If Prime Minister Anthony Albanese wants to be worthy of the mantle of Hawke and Keating, that should be his focus.
